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Brent crude oil edges above $50 after U.S. stockdraw, lower production

SINGAPORE – Brent crude oil prices edged above $50 per barrel for the first time in a week on Thursday as lower stocks in the United States and peaking production by some producers appeared to help reduce huge oversupply, although Asia’s economies showed new signs of weakness. CHICAGO – A U.S. Agriculture Department (USDA) unit is reviewing its procedures after posting incorrect crop data online on Wednesday, an error that temporarily pressured grain prices. HOUSTON – Easy money, super-sized frack jobs, and desperate drillers offering deep discounts to oil producers – all three have been credited for sustaining U.S. crude output during the worst price slump in six years. SINGAPORE – Gold was trading near its highest in a week on Thursday, adding to overnight gains from its biggest jump in nearly a month, as sluggish U.S. inflation data eased fears the Federal Reserve would hike interest rates later […]

Posted On : Published By : Tom Whipple
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Oil Prices Steady Ahead of U.S. Fed Rate Decision

By Jenny W. Hsu Oil prices were largely stagnant in Asian trade Thursday as market participants remained on the sidelines awaiting the U.S. Federal Reserve’s decision on interest rates. Most traders are keeping a close eye on the outcome of the Federal Reserve meeting with the expectation that the U.S. government will stand pat on interest rates due to continuing concerns about the global economy and recent volatility in Chinese equity markets. Softer U.S. inflation data released overnight also makes a rate increase less likely. Global markets were generally higher, while the U.S. dollar is under some pressure ahead of the Fed briefing. U.S. stocks closed higher Wednesday, helping boost sentiment as most Asian markets gained Thursday, with the Shanghai Composite was last up around 0.5%. On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at $47.12 a barrel at 0418 GMT, down […]

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IEA: Age of LNG in question

International Energy Agency says short-term planning may jeopardize growth in the LNG industry. File photo by Stephen Shaver/UPI TOKYO, Sept. 16 (UPI) — Short-term planning from energy policymakers might keep liquefied natural gas off the global stage, the IEA director said during a visit to Tokyo. "If it can compete, then there is a great chance for gas to become a major and relatively clean contributor to energy security," Fatih Birol , the executive director of the International Energy Agency, said during a speech from Japan. "But the current low prices provide only a temporary window of opportunity — an opportunity that policy makers and the industry must seize." The IEA said liquefied natural gas, a super-cooled and denser product with more deliverability options, represents "a golden opportunity" for Asian economies. Asian demand for natural gas is expected to grow steadily through the end of the decade, according to […]

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Iraq: 2 suicide attacks in Baghdad kill at least 14 people

AP Photo/Hadi Mizban BAGHDAD (AP) — Two suicide attackers targeted Iraqi police checkpoints in commercial areas in central Baghdad during rush hour Thursday, killing at least 14 people, officials said. Both attacks were carried out by bombers on foot, wearing explosives-laden vests, two police officers said. One bomber struck in Baghdad’s Bab al-Sharji area, killing eight civilians and a police officer there. Twenty-one were wounded in that explosion. The second bomber hit in al-Wathba Square, killing five people, including two policemen, and wounding 12. Two medical officials confirmed the casualty figures. All officials spoke on condition of anonymity because they are not authorized to talk to reporters. Iraq is going through its worst crisis since the 2011 withdrawal of U.S. troops. The Islamic State group controls large swaths of the country’s north and west after capturing Iraq’s second-largest city of Mosul and the majority of the western Anbar province […]

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OPEC’s new medium-term forecasts show higher demand for its oil: delegates

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. OPEC’s new medium-term forecasts point to higher demand for the group’s oil, OPEC delegates said, a sign that its strategy of letting prices fall is discouraging supplies from competing producers. The forecasts, to be published in OPEC’s World Oil Outlook later this year, are expected to be discussed on Thursday during the second day of a meeting of OPEC’s national representatives taking place at its Vienna headquarters. "The new medium-term numbers show a higher demand for OPEC crude," said one OPEC delegate, who added that oil prices are assumed to be lower than previously. "There is an impact on higher-cost producers." OPEC’s 2014 World Oil Outlook expected demand for its oil to fall to 28.50 million barrels per day (bpd) in 2016 from 30 million bpd in […]

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Conditions seen worsening for majors until late 2016

Fundamental business conditions for integrated oil and gas companies will worsen before signs of improvement appear late next year, according to a Moody’s Investors Service assessment based on reduced expectations for crude oil and natural gas prices ( OGJ Online, Aug. 7, 2015 ). Moody’s expects earnings before interest, taxes, depreciation, and amortization (EBITDA) for the global integrated oil and gas industry to contract by 20% or more this year and to recover only modestly in 2016. “This view is based on our expectations of revenue and cash flow declines and a negative free cash flow profile for the industry in 2015,” the firm says. “We expect the industry’s free cash flow to remain negative in 2016.” Free cash flow is the difference between cash flow from operations and investments. Moody’s expects total free cash flow for the integrated companies it rates to be negative by as much as […]

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Nigerian firms may struggle to repay debt if dollar shortages persist

* Oil price plunge hits Nigerian revenues, currency * Central bank rations dollars to hold naira peg * Yields on some Nigerian Eurobonds near record * Loans, dividends may be more problematic than bonds By Alexis Akwagyiram and Karin Strohecker LAGOS/LONDON, Sept 16 (Reuters) – Already feeling the pinch from slumping oil prices and slowing economic growth, Nigerian companies are finding it increasingly hard to get hold of foreign currency due to central bank restrictions and may struggle to repay their debts. Yields on a number of dollar corporate bonds have risen close to record highs this week, reflecting investors’ anxiety despite an assertion by Nigeria’s richest businessman that no borrower will default due to the currency shortage. Since 2007, Nigerian financial and energy firms such as FBN Holdings and Seven Energy have issued more than $5 billion of dollar-denominated debt on international capital markets, including almost $3 billion […]

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Nigeria: Investigation – Jonathan, Alison-Madueke, Tunde Ayeni, Named in Fraudulent Oil Contracts That Cost Nigeria Billions

PREMIUM TIMES has uncovered one of the most fraudulent crude oil deals carried out by the administration of Goodluck Jonathan, which saw cronies of the president pocket billions of naira through a domestic crude oil transportation contract that violated Nigeria’s procurement and economic regulations. Our estimates indicate that the contracts, which the Nigerian National Petroleum Corporation has now admitted were unnecessarily exorbitant and inappropriately awarded, cost Nigeria N509.3 billion. How much service the companies offered to pocket that amount remains unclear even to the state oil company, insiders say. The deal, later disguised as security contract and channeled through the Nigerian National Petroleum Corporation, saw two companies belonging to Idahosa Okunbor and Tunde Ayeni, illegally rack up billions of naira to purportedly transport crude oil from Escravos to Warri refinery, and Bonny Island to Port Harcourt refinery, by ship, since 2011. The deal involved the transportation of five millions […]

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Oil production starts from Erha North Phase 2 offshore Nigeria

Esso Exploration & Production Nigeria Ltd. , a subsidiary of ExxonMobil Corp., has started oil production ahead of schedule at the Erha North Phase 2 project 60 miles offshore Nigeria ( OGJ Online, June 23, 2015 ). The deepwater subsea development lies in 3,300 ft of water and 4 miles north of Erha field, which has been producing since 2006 ( OGJ Online, May 2, 2006 ). The project includes seven wells from three drill centers tied back to the existing Erha North floating production, storage, and offloading vessel, reducing additional infrastructure requirements. Phase 2 is estimated to develop an additional 165 million bbl from the currently producing Erha North field. Peak production from the expansion is estimated at 65,000 bo/d, increasing total field production to 90,000 b/d. ExxonMobil expects to increase its global production volumes this year by 2% to 4.1 million boe/d, driven by 7% liquids growth. […]

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Recent statistical revisions suggest higher historical coal consumption in China

U.S. Energy Information Administration, China National Bureau of Statistics (NBS) Source: Note: Revised data from or implied by China Statistical Abstract 2015; previously reported data from China Statistical Yearbook 2014 . The values for coal reflect its lower heating value. New preliminary data from the China Statistical Abstract 2015 (CSA2015) show an upward revision to China’s historical coal consumption and production. Energy-content-based coal consumption from 2000 to 2013 is up to 14% higher than previously reported, while coal production is up to 7% higher. These revisions also affect China’s total primary energy consumption and production, which are also higher than previously reported—up to 11% and 7% in some years, respectively, mainly because of the revisions to coal. In 2014, energy-content-based coal consumption was essentially flat, and production declined by 2.6%. China’s National Bureau of Statistics (NBS) typically publishes the CSA in May. The CSA provides annual total primary energy […]

Posted On : Published By : Tom Whipple