Category:

Goldman Sees 15 Years of Weak Crude as $20 U.S Oil Looms

A glut of crude may keep oil prices low for the next 15 years, according to Goldman Sachs Group Inc. There’s less than a 50 percent chance that prices will drop to $20 a barrel, most likely when refineries shut in October or March for maintenance, Jeffrey Currie, head of commodities research at the bank, said in an interview in Lake Louise, Alberta. Goldman’s long-term forecast for crude is at $50 a barrel, he said. Goldman cut its crude forecasts earlier this month, saying the global surplus of oil is bigger than it previously thought and that failure to reduce production fast enough may require prices to fall near $20 a barrel to clear the glut. Prices may touch that level when stockpiles are filled to capacity, forcing producers in some areas to cut output, Currie said Wednesday. “When we think of the longer term oil price, yes we […]

Posted On : Published By : Tom Whipple
Category:

KKR’s Samson Resources Files Bankruptcy as Shale Bet Sours

Oil and gas driller Samson Resources Corp. filed for bankruptcy in Delaware Wednesday night, undone by a collapse in energy prices and billions in debt that KKR & Co. and other investors piled on to fund a 2011 takeover. Tulsa, Oklahoma-based Samson and its owners were stung by the price drop that put money into the pockets of consumers through lower gasoline and heating costs, while driving other producers, such as Sabine Oil & Gas Corp. and Quicksilver Resources Inc., into Chapter 11. Samson’s filing is among the biggest energy bankruptcies in the U.S. this year, but it probably won’t be the last. The shale-oil driller is, in a way, a victim of its own success. Samson and other producers have rushed to use hydraulic fracturing and horizontal drilling to tap previously hard-to-reach oil and gas deposits in shale formations, triggering a production boom that helped send prices tumbling. […]

Posted On : Published By : Tom Whipple
Category:

White House called on to act on oil exports

Responsibility lies with the White House to overturn a ban on crude oil exports, an industry group says. Photo by tcly/Shutterstock WASHINGTON, Sept. 16 (UPI) — If the White House opposes legislative action to overturn a ban on oil exports, the onus is on the executive branch to take action, an industry group said. A House energy committee pushed ahead with legislation that would end a ban on crude oil exports enacted when Arab members of the Organization of Petroleum Exporting Countries stopped shipping oil to the United States in the 1970s. In what industry supporters describe as an era of energy abundance brought on by U.S. shale oil deposits, Republican leaders in the House say U.S. policies are out of date. White House spokesman John Earnest said ending the ban is a matter for the Commerce Department, saying the office of President Barack Obama does not support legislative […]

Posted On : Published By : Tom Whipple
Category:

Continental Sidelines Bakken Rigs

Continental Resources Announces More Reductions Continental Resources continues to showcase their flexibility, announcing this week it will be sidelining rigs in the Bakken while reducing its CAPEX once again. Three week after reporting the “excellent results’ of their second quarter, Continental Resources, Inc. says it now plans to spend approximately $300 to $350 million less than its previously approved capital budget for 2015 in order to deal with the current crude pricing environment. This adjusted spending will be $2.35 billion to $2.40 billion. Harold Hamm, Chairman and Chief Executive Officer commented, “While we do not believe today’s low commodity prices are sustainable long term, we are committed to living within cash flow until they recover. We are reducing capital expenditures to protect our balance sheet and to preserve the value of our world-class assets until commodity prices improve.” Continental will also join other producers who are sidelining their rigs […]

Posted On : Published By : Tom Whipple
Category:

Alberta Regulator Allows Cnooc Oil-Sands Plant to Resume Full Production

CALGARY, Alberta—The Canadian unit of Chinese state-controlled energy giant Cnooc Ltd. CEO 2.76 % said Wednesday that it can resume full production at a troubled oil-sands operation after regulatory authorities eased a suspension order that had crimped its output. Cnooc subsidiary Nexen Energy ULC said Alberta’s chief energy regulator amended an order that threatened to shut down its 50,000 barrel a day Long Lake heavy oil extraction facility located in the province’s northeastern boreal forests. “Nexen is able to resume 100% of our operations” at its Long Lake oil sands plant, the company said in a statement. The Alberta Energy Regulator imposed the order late last month for suspected failure to comply with certain rules, effectively rendering the plant inoperable. The AER scaled back that order earlier this month [Sept. 6], which allowed Nexen to operate at three-quarters of its previous production levels. It further revised the order on […]

Posted On : Published By : Tom Whipple
Category:

Gulf Coast gasoline production jumps 9.2% week on week: EIA

US Gulf Coast gasoline blenders and refiners’ production of finished gasoline increased 190,000 b/d or 9.2% week on week to 2.249 million b/d in the week that ended September 11, posting a five-year high for the second week of September as refineries continue to run at high rates. Gulf Coast refiners bumped up production to utilize 92.3% of their refineries’ operable capacity, recovering from a spate of production issues in the previous week, when capacity utilization was 87.6%. US gasoline demand, however, did not live up to the market’s high expectations for the last major US driving holiday of the year — Labor Day. US product supplied, which is commonly used as a proxy for nationwide gasoline demand, was largely unchanged week on week, falling 34,000 barrels to 8.983 million b/d. Article continues below… Sign up for Global Alert today. Platts Global Alert is a complete real-time information service […]

Posted On : Published By : Tom Whipple
Category:

US EIA to estimate 70-74 Bcf gas storage injection: survey

A consensus of analysts surveyed by Platts Wednesday expects the US Energy Information Administration on Thursday will estimate a natural gas storage injection of 70-74 Bcf for the reporting week that ended September 11. The EIA plans to announce its storage report at 10:30 am EST Thursday. An injection within expectations would be less than the 90-Bcf injection reported at this time in 2014 and comparable to the 75-Bcf five-year average injection, according to EIA data. Article continues below… Platts Natural Gas Alert provides global coverage of the major natural gas and LNG markets, including real-time spot market transactions reported as deals are done and key end-of-day crude and product assessments. The wider range of analysts’ expectations for this week was for a build of 66-77 Bcf. Last week, the EIA reported a 68-Bcf injection that increased inventories to 3.261 Tcf, which was 473 Bcf, or 17%, more than […]

Posted On : Published By : Tom Whipple
Category:

Vanishing CFOs: Why So Many in Oil, Gas are Choosing to Leave

In the months following the sudden dip in crude oil prices that began late 2014, the oil and gas industry has been challenged with finding ways to cope and maintain until the market turns around. The whole “do more with less” approach to work has been adopted by many companies who have had to downsize and restructure within their organizations . But in addition to layoffs and other cost-cutting measures, several companies have had to deal with a few surprises. The most recent downturn has seen a shakeup of many C-suite executives, as some have entered – and departed – their companies. While many smart and resourceful oil and gas companies already have succession plans in place to prepare for senior-level employee departures , for companies that don’t, now is an opportune time to visit the topic and implement some strategies, as the industry can expect to see several […]

Posted On : Published By : Tom Whipple
Category:

Eni sees larger European gas role

Eni Chief Executive Officer Claudio Descalzi hosted European Commissioner for Energy and Climate Action Miguel Arias Canete to discuss European natural gas needs. Photo courtesy of Eni. ROME, Sept. 16 (UPI) — A natural gas discovery off the Egyptian coast and recent cooperation with Cyprus could translate to European energy security, Italian energy company Eni said. Eni Chief Executive Officer Claudio Descalzi hosted European Commissioner for Energy and Climate Action Miguel Arias Canete in Rome to discuss regional energy issues. Descalzi said connecting regional markets and ensuring future supplies could help ensure European energy demands are met without interruption. "Eni’s super giant gas discovery offshore Egypt, along with other important discoveries made in recent years offshore Israel and Cyprus, will allow the East Mediterranean gas hub to contribute significantly to European energy security," the company said in a statement on the meeting. Descalzi met last week with Cypriot President […]

Posted On : Published By : Tom Whipple
Category: Uncategorized

Oil crimping Norway’s economy

Norwegian economy facing downward pressure from lower crude oil prices, statistics office says. File photo by num_skyman/UPI OSLO, Norway, Sept. 16 (UPI) — The low price of crude oil has led to clear downturns in the Norwegian economy and that pressure should persist, government data show. "The Norwegian economy has been in a clear, petroleum-driven cyclical downturn for a year," a statement from Statistics Norway said. Crude oil prices are down more than 50 percent from last year, forcing many energy companies to cut back on spending. In many basins, that means less overall production. Preliminary production figures from the Norwegian Petroleum Directorate, the nation’s energy regulator, show an average daily production of around 1.9 million barrels of oil, natural gas liquids and condensate. That’s about 2 percent less than July. The government’s statistics office said the decline in investment in the petroleum industry is one of the key […]

Posted On : Published By : Tom Whipple