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Oil Prices – What Does “Lower For Longer” Actually Mean?

The latest catch phrase to enter the lexicon of the oilpatch is “lower for longer.” One assumes it simply means oil prices are down and will stay that way for a long time. The difference between a catch phrase and an essay is the detail for purposes of definition. “Lower” must be oil prices below what they used be, although in fact they are not lower than they have ever been. “Longer” refers to an extended period of time, clearly undefined. “Longer” after the oil price collapse of 1985 was over 15 years. Oil is often treated as something a bit more special than a typical commodity because it is so essential to modern life. But let’s take a simple definition for “commodity”, such as, “any useful or valuable thing…something that is bought and sold”, and when the price of this thing falls to the point that it is […]

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EIA expects slump in upstream investments

Federal energy brief says to investments in oil and gas exploration and production to stay lower as crude oil prices remain depressed. Photo by Calin Tatu/Shutterstock WASHINGTON, Sept. 24 (UPI) — Investment in the exploration and production side of the oil and gas sector could flirt with historic lows if oil prices remain depressed, a U.S. brief said. "Low oil prices, if sustained, could mark the beginning of a long-term drop in upstream oil and natural gas investment," a brief from the federal Energy Information Administration said. West Texas Intermediate, the U.S. benchmark for crude oil prices, at around $44 per barrel are roughly 50 percent lower than this date in 2014. EIA explains investments in upstream activity, the exploration and production side of the industry, is "highly sensitive" to fluctuations in crude oil prices. Most companies focused heavily on exploration and production have cut spending and staff in […]

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Sustained low oil prices could reduce exploration and production investment

graph of investment and oil prices, as explained in the article text Source: U.S. Bureau of Economic Analysis, U.S. Energy Information Administration Note: 2015 data are the average of the first two quarters. Low oil prices, if sustained, could mark the beginning of a long-term drop in upstream oil and natural gas investment. Oil prices reflect supply and demand balances, with increasing prices often suggesting a need for greater supply. Greater supply, in turn, typically requires increased investment in exploration and production (E&P) activities. Lower prices reduce investment activity. Overlaying annual averages of the domestic first purchase price (adjusted for inflation) on oil and natural gas investment reveals that upstream investment is highly sensitive to changes in oil prices. Given the fall in oil prices that began in mid-2014 and the relationship between oil prices and upstream investment, it is possible that investment levels over the next several years […]

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World Shale Resource Assessments

This series of reports provides an initial assessment of world shale oil and shale gas resources. The first edition was released in 2011 and updates are released on an on-going basis. Four countries were added in 2014: Chad, Kazakhstan, Oman and the United Arab Emirates (UAE) and are available as supplemental chapters to the 2013 report Technically Recoverable Shale Oil and Shale Gas Resources . The most current version of each country chapter is linked in the table of countries below. Archived editions are provided in links in the sidebar column to the right. Countries assessed by date Unproved technically recoverable Region Country wet shale gas (trillion cubic feet) tight oil (billion barrels) Date updated North America Canada 572.9 8.8 4/14/15 Mexico 545.2 13.1 5/17/13 U.S. 1 622.5 78.2 4/14/15 Australia Australia 2 429.3 15.6 5/17/13 South America Argentina 801.5 27.0 5/17/13 Bolivia 36.4 0.6 5/17/13 Brazil 244.9 5.3 […]

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Court blocks KRG’s oil route to U.S. as Israel exports grow

Oil tanks at Turkey’s Mediterranean port of Ceyhan, which is run by state-owned Petroleum Pipeline Corporation (BOTAS), where oil exports from the Iraqi central government and, separately, from the KRG, are sent. (UMIT BEKTAS/Reuters) A U.S. appellate court has effectively ended the Kurdistan Regional Government’s (KRG) efforts to bring its independent oil exports out of the shadows and into the mainstream marketplace by selling crude in the United States. With its path to the U.S. market blocked – and amidst enduring legal threats from Baghdad – the KRG’s growing exports remain reliant on arrangements with oil trading firms designed to disguise the identity of end-buyers and the financial terms of sale. Much of Kurdist… 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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Saudis Seek to Fend Off U.N. Inquiry on Yemen

GENEVA — As Saudi Arabia and its Arab allies pressed their military offensive against Houthi rebels in Yemen , Saudi diplomats were waging their own battle to fend off calls in the United Nations Human Rights Council for an international inquiry into abuses by all parties to the Yemeni conflict. Those calls came in a council resolution submitted Thursday by the Netherlands , with support from a group of mainly Western countries, that requests the United Nations high commissioner for human rights send a mission to Yemen. The Dutch resolution draws on deepening international alarm over the civilian toll inflicted by both sides in the conflict and the effect of a blockade imposed by the Saudi-led coalition that has delayed delivery of humanitarian aid, including medicine and the fuel needed to keep the dwindling number of hospitals operating. At least 1,527 civilians were killed and an additional 3,548 injured […]

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China to Announce Cap-and-Trade Program to Limit Emissions

Photo Presidents Obama and Xi Jinping of China left the White House on Thursday for dinner across the street at the Blair House. Credit Doug Mills/The New York Times WASHINGTON — President Xi Jinping of China will make a landmark commitment on Friday to start a national program in 2017 that will limit and put a price on greenhouse gas emissions, Obama administration officials said Thursday. The move to create a so-called cap-and-trade system would be a substantial step by the world’s largest polluter to reduce emissions from major industries, including steel, cement, paper and electric power. The announcement, to come during a White House summit meeting with President Obama , is part of an ambitious effort by China and the United States to use their leverage internationally to tackle climate change and to pressure other nations to do the same. Joining forces on the issue even as they […]

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OPEC is winning battle to stimulate gasoline demand: Kemp

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. OPEC’s bid to curb production of high-cost oil is taking time to produce results but the organization is already making good progress on its other objective of stimulating fuel demand. In the first half of the year, gasoline deliveries into U.S. local markets jumped by 4.3 percent compared with the same period in 2014, according to the U.S. Energy Information Administration. The United States is the world’s largest gasoline consumer and its gasoline demand accounts for 10 percent of all crude and condensates produced worldwide. In the first six months of 2015, U.S. gasoline consumption rose at the fastest rate since 1985 – another occasion on which the real price of oil halved over 12 months and stimulated demand ( link.reuters.com/xux65w ). U.S. gasoline sales have fallen […]

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Iran Sees Oil Exports Starting to Rise as Early as Late November

GENEVA—Iran expects to be able to increase its oil exports by 500,000 barrels a day by late November or early December with sales to Asia, a top Iranian oil official said Thursday, even before most western sanctions would lift. By mid-2016, Iran expects that its exports will exceed today’s by 1 million barrels a day under that scenario, said Ali Kardor, the chief of investment for the National Iranian Oil Company. “We are ready,” Mr. Kardor said, speaking on the sidelines of a conference here in Geneva promoting business ties between Europe and Iran. The timeline laid out by Mr. Kardor is faster than many analysts and market participants believe Iran is capable of achieving. Iran has been the target of crippling sanctions from much of the western world since 2012 over the Persian Gulf country’s attempts to create a nuclear program. Persian Gulf members of the Organization of […]

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Iranian oil conference postponed

Investment conference aimed at highlighting post-sanctions opportunities in Iran’s oil sector postponed without explanation File photo by Maryam Rahmanian/UPI TEHRAN, Sept. 24 (UPI) — A London conference aimed at detailing new investment opportunities in the Iranian oil sector has been postponed, the group organizing the event said. "The Iran oil and gas post-sanction summit has been postponed until Feb. 22-24, 2016," the event organizers said in a statement. Event organizer CWC Group said in response to email questions the event was postponed following recommendations from the National Iranian Oil Co. The Iranian oil minister had said new contracts for potential players would be formally outlined during an investment conference scheduled originally for December. Under the new terms, the NIOC would set up joint ventures with foreign companies, which would be paid with a share of the output. Iranian Oil Minister Bijan Zangeneh said "all international" energy companies can present […]

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OPEC’s Family Feud

Photo illustration: 731; Photographs: Alamy When Venezuelan Oil Minister Juan Pablo Pérez Alfonso resigned in 1963, he blasted the Organization of Petroleum Exporting Countries, at the time torn by internal rivalries, for failing to produce any benefits for his country. Half a century later, OPEC is still split and Venezuela is again unhappy, this time at the unwillingness of the organization’s top producer, Saudi Arabia, to rescue oil prices from a six-year low that’s dragging the battered Venezuelan economy into an even deeper crisis. On Sept. 10, Venezuela’s oil minister, Eulogio del Pino, tweeted appeals for OPEC and non-OPEC countries “to have a discussion on fair prices, minimum prices to ensure sustainability” and to “overcome our differences of opinion.” Venezuelan President Nicolás Maduro said on Sept. 16 that he was making progress on organizing a summit of petroleum exporting countries to have that discussion. OPEC member Algeria is backing […]

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U.S., China to Announce Steps to Fight Climate Change

U.S. President Barack Obama with Chinese President Xi Jinping on the White House grounds Thursday. The U.S. and China on Friday will announce significant steps in their efforts to combat climate change, including a pledge by China to launch a program by 2017 to cap some emissions and put a price on carbon, senior Obama administration officials said Thursday. The announcements will detail the two countries’ strategies for reaching emissions targets and aim to bolster efforts to complete an international accord to reduce global carbon-dioxide emissions, which is meant to be wrapped up in December. The Obama administration officials, touting a new era of U.S.-China climate diplomacy, said the statement would demonstrate to the world the countries’ commitment to reaching agreed-upon targets. Chinese President Xi Jinping ’s decision to put a price on CO2 emissions with a cap-and-trade system marks the first time China has launched such an initiative. […]

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Transocean Cited in Petrobras Carwash Corruption Investigation

Transocean Ltd., the world’s largest offshore rig contractor, is being linked for the first time to the corruption probe of Petroleo Brasileiro SA, the state-owned energy giant at the center of Brazil’s biggest corporate scandal. A former executive at Brazil’s state-run oil company has testified to receiving what he says were payments made by someone claiming to be a Transocean agent in exchange for a rig-operation contract from Petrobras. “Transocean has a long-standing commitment to and upholds the highest standards for corporate ethics and compliance,” the company said in an e-mailed response. “Our employees — and everyone conducting business on our behalf — are required to adhere to our high standards for integrity, honesty, financial discipline and legal and regulatory compliance.” As a result of the probe into the alleged pay-to-play scheme, known as Carwash, Petrobras has temporarily blocked more than 20 suppliers from future work with the oil […]

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Engie Executive Says Nobody Is Making Money off U.S. Gas Exports

Just as gas export-terminals are preparing to start up along America’s Gulf Coast, the oil-price crash has made it unprofitable to send the U.S. fuel abroad, according to the North America head of power and natural gas supplier Engie. It costs about $2 to liquefy gas and another $3 to take it from the U.S. to Asia, said Zin Smati, president and chief executive officer of Engie’s GDF Suez Energy North America. Engie changed its name from GDF Suez SA in April. Those costs used to leave plenty of profit margin when the gap between LNG prices in Asia and natural gas in the U.S. was more than $14 per million British thermal units. Now, the spread is less than $5, according to data compiled by Bloomberg. “You cannot ship gas from the United States anymore,” Smati said at the Council of the Americas energy conference at Rice University […]

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North Dakota panel approves plan to delay gas flaring limits

The North Dakota Industrial Commission approved Thursday an industry proposal to delay further cuts to associated gas flaring until at least October 2016. The proposal, from the North Dakota Petroleum Council, is needed due to the lack of new gas capture and pipeline infrastructure, which have been delayed for a variety of reasons, including low oil and gas prices, right-of-way disputes and pad size limitations, the council argued. Under a state mandate the commission approved in 2014, operators were required to reach a set of benchmarks to limit flaring over time, including 15% by 2016 and 10% by 2020. Producers would face production curtailment penalties if they fail to meet those flaring reduction benchmarks. But according to the industry group, operators are unable to reach the upcoming 15% benchmark and want it pushed back to at least October 2016. The three-member commission, which includes North Dakota Governor Jack Dalrymple, […]

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Can Part-Time Work Minimize the Number of Layoffs in Oil, Gas?

The latter part of 2014’s plummeting oil prices set the stage for a challenging 2015 and remaining uncertainty for 2016. Companies large and small, independent and integrated, have been affected by the downturn. It seemed like there were layoffs abound in 2015 – more than 150,000 were reported in June . No company was immune. But, despite the downturn, companies have to remain operational. Somewhere in between continual mass layoffs and companies becoming insolvent has to be a middle ground that both companies and workers will accept. Is part-time work the answer? Rigzone explores the possibility. Weighing Options When the industry peaks and exploration and production is up, companies may feel like they have plenty of employees, but once they start trimming employees during a downturn, there’s significantly less people to do the work or any new work that comes about. With the amount of layoffs already reported this […]

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TransCanada Says Cutting 20% Of Senior Management Positions

CALGARY, Alberta, Sept 24 (Reuters) – Pipeline company TransCanada Corp is cutting 20 percent of its senior management positions as a result of the continuing slump in oil prices, a company spokesman said on Thursday. TransCanada is the company behind the controversial and long-delayed Keystone XL pipeline to the United States, and the cross-Canada Energy East project. (Reporting by Nia Williams; Editing by Chris Reese)

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Salt caverns to prevent oil storage shortage: VTTI

Birds fly over storage tanks on a Continental Resources oil production site near Williston, North Dakota January 23, 2015. The world’s oil storage tanks are brimming but there is plenty more space to hand in natural salt caverns and elsewhere, said the head VTTI, a leading player in the sector. The crude price collapse has hit energy companies hard, but oil storage is booming with producers and traders renting tanks and investors snapping up assets. "There is a lot of capacity but there is also a lot of demand," said Rob Nijst, chief executive officer of VTTI, which is half owned by the world’s largest oil trader Vitol. "Everyone wants more storage volumes at the moment." The high volatility in oil prices has offered trading houses such as Vitol, Trafigura, Mercuria, Royal Dutch Shell and BP many opportunities to make money through storage. "The price volatility has been a […]

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The Connection Between Cleaner Air and Longer Lives

Continue reading the main story Slide Show Slide Show|12 Photos A Look Back at the Smog A Look Back at the Smog CreditNeal Boenzi/The New York Times Back in 1970, Los Angeles was known as the smog capital of the world — a notorious example of industrialization largely unfettered by regard for health or the environment. Heavy pollution drove up respiratory and heart problems and shortened lives. But 1970 was also the year the environmental movement held the first Earth Day and when, 45 years ago this month, Congress passed a powerful update of the Clean Air Act . (Soon after, it was signed by President Richard Nixon , and it was followed by the formation of the Environmental Protection Agency and passage of the Clean Water Act, making him one of the most important, though underappreciated, environmentalists in American history.) Since that time, the Clean Air Act has […]

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Native Women Shut Down Pipeline “Consultation”

Montreal — First Nations women and supporters sent a clear message to TransCanada this Wednesday evening that the Energy East pipeline is not welcome through First Nations lands. “What we want TransCanada to understand is that no means no. This is Kanien’ke, this is Mohawk Land and we are tired of occupation, we are tired of environmental disaster.” said Lickers at Wednesday night’s hearing. “This is our land and we are going to protect it.” Amanda Lickers and Vanessa Gray were 2 of several First Nations opponents to the Energy East present to express their outrage at the public hearings hosted by the Communauté métropolitaine de Montréal. The purpose of the hearings is to establish a community report to submit to Office of Public Hearings on the Environment (BAPE) and the National Energy Board (NEB). “But the consultation process does not work”, states Lickers, whose family is from Six […]

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Russia Exporter-Tax Anxiety Spurs Worst Run for Stocks in Year

Russian stocks headed for their longest streak of losses in more than a year as the nation’s biggest oil and mining companies fell on concern they may be targeted in a government drive to extract more taxes to cover a budget shortfall. Uralkali PJSC, Russia’s largest potash company, fell 2.8 percent, contributing to the benchmark Micex Index’s 0.8 percent drop. The gauge has lost almost 7 percent in the last six days, trimming its advance this year to 16 percent. The ruble traded little changed against the dollar at 66.3860 by 5:02 p.m. in Moscow. The ruble’s 50 percent devaluation against the dollar since the start of 2014 has boosted exporters’ foreign-currency earnings and Finance Minister Anton Siluanov on Wednesday said it’s time for the government to take a share of the windfall. While the ministry has proposed boosting the tax on oil companies to bring in more than […]

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Total CEO: Russian Arctic Project Gets Chinese Funding Boost

Yamal LNG, a $27 billion project on a Russian peninsula jutting into the Kara Sea, has been beset by questions over how to pay for it since the lead partner, OAO Novatek , NVTK -3.40 % was hit by U.S. sanctions following Russia’s annexation of Crimea last year. With most western financing cut off, the partners have turned to Chinese state banks for $12 billion in loans but none have been approved yet. The project has become a test of whether complicated, expensive Russian energy developments are possible in an era of stringent American sanctions on the country’s oil-and-gas industry. This month, China’s $40 billion Silk Road Fund said it would finance part of the project, a development Total CEO Patrick Pouyanné called “a clear commitment by China” in an interview Wednesday. The price paid for Silk Road’s 9.9% stake in Yamal wasn’t disclosed. Silk Road, a state-owned infrastructure […]

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Commodities Traders Brace for New European Rules

LONDON—Europe’s commodities traders are warning that new regulations set to be released within days could roil markets and push up costs for a range of essentials from crude oil to chocolate. A final draft of expanded rules governing the European Union’s oversight of financial markets is expected to extend its authority over firms that focus on trading in oil, farm products, industrial metals like copper and a host of other commodities. It would add a new layer of scrutiny for an industry that has historically operated with limited oversight . These companies—like BP BP 0.80 % PLC, Glencore GLNCY -7.01 % PLC and Vitol Group—buy and sell huge volumes of oil and industrial metals on a daily basis, hedging their stocks of raw materials with sizable positions in financial markets. Though it is difficult to quantify just how big they are, Vitol stunned market watchers in 2008 when regulators […]

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Whatever Happened to Peak Oil?

Offshore oil platform image via shutterstock. Reproduced at Resilience.org. Whatever happened to “peak oil” – the assertion that the rate at which oil is extracted from the Earth is nearing a maximum or peak level? With falling oil and gasoline prices and a boom of new oil development in the United States and elsewhere, concern about global oil supplies have faded from public view. But have concerns about peak oil really disappeared? What key factors have changed in the oil industry, and what challenges remain? Are we entering a new era of “abundance” or are the risks of the world’s dependence on oil rising? Guests: Key Questions: Cost : What are the trends regarding costs to maintain global oil production now and in the future? Are costs of developing new oil rising or are fracking and other technologies driving production costs down? Do falling prices mean that oil is […]

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Oil Rebounds as U.S. Inventory Decline Counters Easing Demand

Oil rebounded in New York from its biggest drop in three days as a decline in U.S. crude inventories tempered signs that refinery maintenance is crimping demand. West Texas Intermediate futures advanced as much as 1.5 percent, trimming Wednesday’s 4.1 percent slump. Nationwide crude inventories fell more than the median estimate in a Bloomberg survey, according to data from the Energy Information Administration. Refinery utilization slid 2.2 percentage points while daily crude output climbed by 19,000 barrels to 9.14 million. Even with Thursday’s recovery, oil prices are still down more than 25 percent from this year’s closing peak in June on speculation a global glut will be prolonged. While U.S. crude stockpiles declined for a second week through Sept. 18, they remain almost 100 million barrels above the five-year seasonal average. “Crude stocks fell as imports remained low,” Amrita Sen, chief oil analyst at consultants Energy Aspects Ltd. in […]

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Oil edges up on falling U.S. inventories, but Asia concerns to drag

An oil pump jack can be seen in Cisco, Texas, August 23, 2015. Oil prices edged up early on Wednesday after U.S. crude stocks were estimated to have dropped last week, stripping some supplies out of an oversupplied market that has seen prices more than halve since June 2014. Industry group the American Petroleum Institute reported that U.S. crude stockpiles fell 3.7 million barrels last week, with stocks at the Cushing, Oklahoma delivery point for U.S. crude futures alone down almost 500,000 barrels. [API/S] U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading at $46.56 per barrel at 0051 GMT, up 20 cents from their last settlement. Globally traded Brent futures LCOc1 were at $49.19 per barrel, up 11 cents. But traders said some downward pressure was likely to build during Asian trading. "Oil, like other commodities, is in the middle of a glut. Most say there are […]

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Oil slumps to end at lowest level in over a week

Bloomberg Refinery maintenance season may help crude-oil stockpiles grow. Oil futures ended Wednesday at their lowest level in more than a week, with traders betting that U.S. inventories will soon begin to climb as refineries shutdown for seasonal maintenance. Prices had earlier found support on the back of a second straight weekly decline in U.S. crude supplies, but total domestic production edged a bit higher in the latest week and disappointing Chinese manufacturing data renewed concerns over demand from the world’s second-largest oil consumer. Crude Oil – Electronic (NYMEX) Nov 2015 November West Texas Intermediate crude CLX5, -3.54% settled at $44.48 a barrel, down $1.88, or 4.1% on the New York Mercantile Exchange after earlier tapping a high above $47. Prices settled at their lowest level since Sept. 14. November Brent crude LCOX5, -2.47% on the ICE Futures exchange settled down $1.33, or 2.7%, to $47.75 a barrel. The […]

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Oil unlikely to return to $100 a barrel for years

Oil won’t see $100 for a long time, says OPIS’s Tom Kloza. Traders said goodbye to $100 oil prices a little over a year ago, and they might be staying away even longer than some expect. West Texas Intermediate crude-oil prices won’t likely climb back to $100 a barrel this year, or next, according to Tom Kloza, global head of energy analysis at Oil Price Information Service. ‘Generally, it is difficult to make a case for $100 a barrel oil through the next few years.’ “Anything beyond the realm of the next 18 months smacks of witchcraft rather than real analysis,” he said in an email interview. “Generally, it is difficult to make a case for $100 a barrel oil through the next few years.” Kloza sees a more realistic range between $40 and $60 a barrel for monthly WTI averages over the next 15 months. “Anything north of […]

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Global LNG market is heading toward a surplus, BRG analyst says

Countries attempting to import more LNG could increase an already growing advantage over suppliers worldwide in the next few years, a market analyst suggested. “Demand growth could be slow for the next few years, but as lower prices sink in, it could start to grow,” said Christopher Goncalvez, a managing director in Berkeley Research Group’s Washington office. “Japan is a huge wild card as it ponders whether to reactivate its idled nuclear power capacity. That creates so many uncertainties.” A global LNG surplus already exists, Goncalvez told an audience at the US Energy Association on Sept. 22. “We have become much more conservative with regard to LNG exports,” he said. “We see a range of 44-63 [billion cu m]/year by 2020. There are some variables out there that might possibly drive exports up a bit. But demand won’t be able to keep up with supply for the next decade.” […]

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Oil Market Doldrums Seen Delaying Sanctions for New LNG Projects

The year-long decline in oil prices has taken its toll on new liquefied natural gas (LNG) projects worldwide as upstream petroleum firms reduced capital expenditure (CAPEX), including delaying or even cancelling greenfield developments. Currently, at least 46 major projects – holding approximately 20 billion barrels of oil equivalent in resources – have been deferred due to the market downturn, Wood Mackenzie’s Head of Gas and Power Consulting Rajnish Goswami said Sept. 9 at CWC’s 7th World LNG Series: Asia Pacific Summit in Singapore. “LNG prices are under pressure with near term weak demand. Investments in new LNG supply is under threat and $200 million CAPEX [have been] delayed, many of them gas projects,” he added. Pessimism shrouded the industry, affecting upstream investments, as global oil prices have shown little signs of recovery after falling below the psychologically significant $100 a barrel mark just over a year ago. U.S. crude […]

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JODI Data and Giant Field Depletion

I am starting this post off with a news article because it explains why JODI has U.S. production numbers wrong for July. No, U.S. Oil Production Probably Didn’t Rise in July The Joint Organizations Data Initiative (JODI) releases monthly oil supply-and-demand data for about 80 countries, which it gathers by directly surveying the countries. It is widely cited by analysts, especially for its figures on demand, imports and exports. The latest JODI data released Sunday showed that U.S. crude-oil production rose from 9.3 million barrels a day in June to 9.5 million barrels in July. But the EIA’s latest forecast called for July production to fall to 9.2 million barrels a day in July , continuing the trend of declining U.S. production as companies cut spending in the face of low prices. For the charts below I have used JODI data for all Non-OPEC nations except those that do […]

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OPEC focuses on rival mega projects, lives with shale swing output

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. After almost a year of painfully low oil prices, OPEC members are beginning to believe they are winning against upstart U.S. shale producers in a short-term market share contest. Yet insiders and experts say OPEC is looking for a longer-lasting impact on other high-cost production oil field plans, many in deep oceans, with bigger time scales, even if that means a period of cheap oil prices lasting for years. Privately, OPEC’s core Gulf members say they have resigned themselves to the idea that the U.S. shale industry’s high-tech flexibility means it will respond quickly when prices start rising again, making the United States the new swing producer in world oil, the role held for so long by Saudi Arabia. "The oil surplus is slowly being drawn from […]

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Putin plans air strikes in Syria if no U.S. deal reached: Bloomberg

Russian President Vladimir Putin delivers a speech during an opening ceremony of the MAKS International Aviation and Space Salon in Zhukovsky, outside Moscow, Russia, August 25, 2015. Russian President Vladimir Putin is preparing for unilateral air strikes against Islamic State in Syria if the United States rejects his proposal to join forces, Bloomberg reported on Wednesday, citing two people familiar with the matter. Russia has increased its military presence inside Syria and its arms supplies to the Syrian army as it steps up support of longtime ally President Bashar al-Assad, drawing warnings of further destabilization from Western countries that oppose Assad. A Russian diplomatic source told Reuters on Wednesday that Moscow sees a growing chance to reach international agreement on fighting terrorism in Syria and end the crisis that has stretched into its fifth year. Bloomberg reported that Putin’s preferred course of action was for the U.S. government and […]

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Stampede Near Mecca Leaves at Least 310 Dead

Photo Emergency workers at the site of a stampede in Mina, outside the Muslim holy city of Mecca, on Thursday. Credit Saudi Civil Defense, via Reuters BEIRUT, Lebanon — At least 310 people were killed, and 450 were injured, in a stampede near Mecca, Saudi Arabia, on Thursday. The deaths occurred on the first day of Eid al-Adha, one of the holiest holidays in the Muslim calendar, and as millions of Muslims were making their pilgrimage, or hajj, to Mecca. Saudi civil defense authorities confirmed the deaths on Twitter and said that two medical centers had been opened in Mina to treat the injured. More than 4,000 emergency workers were sent to the scene, and hundreds of people were taken to four hospitals. The stampede occurred less than two weeks after a large construction crane toppled and crashed into the Grand Mosque in Mecca, killing at least 111 people […]

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China Is Sitting on an Ocean of Diesel Fuel

Add diesel to the commodities flooding global markets from China. The nation exported a record volume of the fuel last month after already shipping unprecedented amounts of steel and aluminum overseas. The weakest economic growth since 1990 is sapping domestic demand for commodities, while refineries, mills and smelters grapple with excess capacity after years of expansion. “A lot of it has to do with slowing demand at a time when companies had plans for much a better demand environment, so capacities had been increased,” said Ivan Szpakowski, a commodities strategist at Citigroup Inc. in Hong Kong. “As demand slows, that’s led to an overcapacity in the domestic market and producers have sought to export the surplus.” Exports of Chinese raw materials are exacerbating a global glut that drove prices to the lowest since the 2008 financial crisis and prompted steel and aluminum producers around the world to protest against […]

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China Data: August gasoil exports hit new record, up 33% from July

China’s gasoil exports hit a new record high at 722,516 mt in August, and are expected to remain on an upward trend amid sluggish domestic demand and with support from sufficient exports quotas. The August exports were up 33% from 543,992 mt exported in July, and also up 77% on year from 407,801 mt exported in August 2014, according to data released Tuesday by the General Administration of Customs. Gasoil exports of 669,831 mt in June this year were the second highest level recorded, Platts reported earlier. Chinese refiners have been boosting oil product exports this year — mainly gasoil — due to slow domestic demand, said a source with Sinopec. "Demand for gasoil is really bad in the domestic market this year and the demand growth for gasoline has also slowed, which forced many refineries to export more in a bid to ease stock pressure," the source said. […]

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White House says State Dept. still considering Keystone pipeline

A depot used to store pipes for Transcanada Corp’s planned Keystone XL oil pipeline is seen in Gascoyne, North Dakota November 14, 2014. Following remarks by Democratic presidential candidate Hillary Clinton that she disapproves of the Keystone XL pipeline project, the White House said on Wednesday that the State Department continues to consider the project. White House spokesman Josh Earnest said he was not sure if there were many people surprised by Clinton’s comments.

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U.S. crude stockpiles fall more than expected last week: EIA

Oil storage tanks are seen at sunrise with the Rocky Mountains and the Denver downtown skyline in the background October 14, 2014. U.S. crude oil stocks fell more than expected last week, while gasoline inventories increased and distillates drew down unexpectedly, data from the Energy Information Administration showed on Wednesday. Crude inventories fell 1.9 million barrels in the week to Sept. 18, the second straight weekly drawdown, compared with analysts’ expectations for a decrease of 533,000 barrels. The fall was smaller than the previous week’s 2.1-million barrel draw. U.S. crude imports fell 13,000 barrels per day last week with Gulf Coast imports dropping to second lowest weekly level since 1992. Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures fell 462,000 barrels, EIA said. Crude futures extended gains in choppy trade after the bigger-than-expected drop, but pared gains later. "The drawdown is giving us a bit […]

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U.S. gasoline sales surge at fastest for over a decade: Kemp

A view of the Tesoro refinery in Martinez, California, February 2, 2015. Gasoline sales to U.S. motorists rose by more than 5 percent in July compared with the same month a year before, according to the U.S. Energy Information Administration (EIA). Gasoline sales are rising at the fastest year-over-year rates for more than 14 years as demand surges. Continued economic expansion, rising employment and cheaper fuel are putting a record volume of traffic on U.S. roads as well as encouraging motorists to upgrade to larger and more fuel hungry vehicles. Gasoline sales were up 5.1 percent in July 2015 compared with July 2014, according to the EIA’s Prime Supplier Report published on Tuesday ( link.reuters.com/pyv65w ). Sales for the first seven months as a whole were up 4.4 percent compared with 2014 ( link.reuters.com/myv65w ). The Prime Supplier Report is based on a census of around 200 firms that […]

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Energy Capital Said to Seek Buyers for Stake in Summit Midstream

Energy Capital Partners is seeking seeking buyers for its interest in Summit Midstream Partners LP, a deal that would include a minority stake in the pipeline operator as well as ownership of its general partner, according to people familiar with the matter. The sale would also include some oil and gas gathering and processing operations in North Dakota, Colorado and Ohio owned by an affiliate of Summit Midstream, said the people, who asked not to be identified because the matter is private. Energy Capital is working with Barclays Plc to find a buyer for the assets, which could fetch at least $2 billion, one person said. If offers are too low, the firm may also consider taking the assets public. Such a listing would resemble Tallgrass Energy Partners LP’s initial public offering earlier this year of affiliate Tallgrass Energy GP, the people said. A spokesman for Barclays declined to […]

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Imperial Cuts Spending on Existing Projects as Costs Drop

Imperial Oil Ltd. has been able to lower the amount of capital reinvestment needed to sustain the business to about C$1.2 billion ($900 million) a year from C$2 billion a year ago, helped by shrinking supplier costs. Imperial expects overall annual spending on expansion and maintenance to average about C$2.5 billion in the coming years as it reduces costs and slows expansion, Chief Executive Officer Rich Kruger said Wednesday in a webcast of the company’s annual investor day. The company is basing its operations on the current price for oil, which is helping to create a “challenging” environment for Canadian producers, Kruger said. “If prices rise, so be it,” he said, adding that the company is planning for the “long term.” Canadian oil-sands producers have cut budgets along with the sinking price for crude this year. Imperial operates bitumen mining at its Kearl site, in addition to its Cold […]

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Challengers Attack Canada’s Pro-Oil Harper for Stalled Pipelines

Stephen Harper’s two challengers for prime minister have regularly taken swipes at him during Canada’s election campaign for failing to get oil pipelines built. Harper, a Conservative who represents a Calgary constituency, is regarded as one of the most petroleum-friendly politicians in Canada. Therein lies the problem, according to his opponents. How to start up new pipelines is a major preoccupation for a Canadian oil industry increasingly worried about getting product to market. The troubled Keystone XL project is just one of four proposals mired in delay due to concerns over carbon emissions from the oil sands and potential spills. “He hasn’t got pipelines built. He has made the oil sands an international pariah,” Liberal Leader Justin Trudeau said of Harper during a leaders debate on the economy last week that happened to be held in hard-hit Calgary. “Under Stephen Harper’s stewardship,” New Democratic Party Leader Tom Mulcair said, […]

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EPA hears widely different views on methane emission threat

AP Photo/Brennan Linsley DENVER (AP) — Over-regulating methane emissions could discourage the use of environment-friendly natural gas, an energy industry representative told the Environmental Protection Agency on Wednesday. However, a former Colorado air quality official countered that such controls would be a cost-effective way to fight climate change. The EPA heard radically different views as it opened public hearings in Denver on its proposal to slash allowable methane emissions from oil and gas production. Sessions were also scheduled in Dallas on Wednesday and in Pittsburgh on Sept. 29. The proposed rules are aimed at cutting the emissions by 40 to 45 percent by 2025 compared with 2012 levels. Methane is a key component of natural gas and a powerful greenhouse gas that traps heat in the upper atmosphere. The EPA estimates the new rule would cost industry from $320 million to $420 million annually by 2025 but would reduce […]

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Shale gas a common-sense energy choice, London says

British Geological Survey begins new baseline studies at potential hydraulic fracturing site just as the government aims to accelerate the industry. Photo courtesy of the BGS LONDON, Sept. 23 (UPI) — Natural gas from shale can be the energy bridge toward a greener future while at the same providing economic stimulus, the British government said. The British government estimates shale basins in the country may hold more than 1.3 quadrillion cubic feet of natural gas, a level the government said could help an economy with natural gas imports on pace to increase from 45 percent of demand in 2011 to 76 percent by 2030. Andrea Leadsom, minister of state at Department of Energy and Climate, said a shale gas industry would help ensure energy security and potentially add 65,000 new jobs to the British economy. "Operators will pay communities $150,000 for each exploration well site plus 1 percent of […]

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TransCanada counters Clinton’s Keystone XL claims

Former Secretary of State and Democratic presidential candidate Hillary Clinton says planned Keystone XL oil pipeline runs against global moves to tackle climate change. Photo by Pete Marovich/UPI CALGARY, Alberta, Sept. 23 (UPI) — In a counter to Hillary Clinton , Keystone XL planner TransCanada said pipelines are the safest and least carbon-intensive ways to transport crude oil. Democratic presidential candidate and former Secretary of State Clinton said from the campaign trail in Iowa the planned Keystone XL pipeline from Canada would be a "distraction" to the evolving fight against climate change. "I do not think it is in the best interest of what we need to do to combat climate change," she said. The Republican-led Congress that took its seat in January said passing legislation to approve construction of Keystone XL, offered for U.S. consideration more than six years ago, was job No. 1. The pipeline has become […]

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EIA: Bakken Production Declines

Bakken Rigs and Productivity Production in the Bakken Shale play decreased over the summer according to the Energy Information Administration’ s latest Drilling Productivity Report. Related: Bakken Rig Count Falls to 70 Since April, oil production in the major shale plays has decreased sharply, with total production falling by 350,000 barrels and the EIA expects that this trend will continue and for production to decline for most of the key US shales by October. On September 14th, the EIA reported that the Bakken Shale produced 1.22 MMbpd (million barrels per day) of crude oil in August, 1.40% less than the month before but 5.10% more that a year ago. The Bakken will likely see a fall and is expected to produce 1.18 MMbpd (million barrels per day) of crude oil in October. And the bad news gets worse. Recent data from FactSet suggests that producers in the shale industry […]

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Feds to Lease Ocean Floor Off N.J. Coast for Windmills

ATLANTIC CITY, N.J. (AP)—The federal government plans to lease nearly 344,000 acres of the ocean floor off the coast of New Jersey to companies interested in building offshore windmills to generate electricity. The Interior Department and the Bureau of Ocean Energy Management say that if fully developed, the leases could result in enough wind-generated electricity to power 1.2 million homes. The leases are to be sold Nov. 9. “On the heels of this summer’s historic ‘steel-in-the-water’ milestone for the nation’s first commercial offshore wind farm, today’s announcement marks another major step in standing up a sustainable offshore wind program for Atlantic coast communities,” Interior Secretary Sally Jewell said Wednesday. In July, construction started on Deepwater Wind’s $225 million, 30-megawatt offshore wind project off Block Island in Rhode Island that will provide electricity to Block Island and Rhode Island mainland consumers. So far, 13 companies have been qualified to bid […]

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Coal mine starts continue to decline

graph of U.S. coal mine starts and total production, as explained in the article text Source: Mine Safety and Health Administration (MSHA) Note: Reactivated mines are those mines with production reported in previous years but not in the preceding year. The number of new and reactivated coal mines that began production in 2013 fell to the lowest level in at least the past 10 years. The addition of 103 mines in 2013 came as 271 mines were idled or closed, resulting in a 14% decline in the total number of producing coal mines from 2012 to 2013. The 2013 total was 397 fewer coal mines than in 2008, when coal production was at its highest. Although preliminary 2014 data on coal production from the Mine Safety and Health Administration indicate a slight increase both in production and in new and reactivated mines for 2014, these levels will still be […]

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