Category:

Pursuit of China’s Oil Prize Is a Race for Second Place

In the race to supply crude to the world’s biggest energy user, it’s the tussle for second place that’s too close to call. Russia, Angola and Iran are vying to be runner-up to Saudi Arabia as the top seller to China. The contest is set to intensify as Iran seeks to recover market share lost because of sanctions and the U.S. Congress debates a nuclear deal that’ll allow the Persian Gulf state to boost shipments. China overtook the U.S. as the biggest importer of crude most recently in June, taking advantage of a 50 percent slump in benchmark prices over the past year to boost strategic reserves. With the Asian nation forecast to account for more than a quarter of global demand growth in 2016, the prize of becoming a top supplier will bolster the economic health of national producers that depend on energy exports for most of their […]

Posted On : Published By : Tom Whipple
Category:

PetroChina’s Slump Seen Ignoring Value of Oil Pipeline Spinoff

PetroChina Co.’s slump to the lowest in six years may be ignoring the potential value from spinning off its huge pipeline network as part of the country’s energy industry reforms. Shares of China’s biggest oil and gas producer are trading in Hong Kong at the lowest since the global financial crisis, reflecting a plunge across the industry as oil prices collapse. The company, which has lost more than 45 percent in the past year, closed Monday at the lowest since March 2009. The stock isn’t reflecting the “goldmine” of its 77,000-kilometer (47,855-mile) pipeline network, according to Laban Yu, a Hong Kong-based analyst at Jefferies Group LLC. Shares were trading down 0.5 percent at HK$5.69 at 1:34 p.m. local time. “Pipeline assets alone could be worth HK$3.55 a share, but there’s zero consideration for such assets in the current stock prices,” Yu said. “It’s the elephant in the room.” The […]

Posted On : Published By : Tom Whipple
Category:

Operational constraints limit crude storage at U.S. refineries: Kemp

The Tesoro oil refinery is viewed from the air in Carson, California August 5, 2015. U.S. commercial crude stocks are still close to their highest levels in over 80 years, but operational requirements prevent refineries filling on-site storage facilities to their maximum capacity. An increasing proportion of U.S. crude oil stocks is held in off-site tank farms, some owned or leased by refiners themselves, but many owned or leased by marketers and traders. According to the Energy Information Administration (EIA), which surveys storage capacity every six months, total crude in storage at the end of March was 475 million barrels, and the country had capacity to store up to 660 million. Only 182 million barrels of storage capacity, around 28 percent, was on site at oil refineries. The rest was off site at tank farms or in pipelines, railroad tank cars, barges and oilfield tanks. Most of the crude […]

Posted On : Published By : Tom Whipple
Category:

U.S. to open up offshore acreage for drillers

Federal government schedules auctions for March for new oil and gas opportunities in the U.S. waters of the Gulf of Mexico. File photo by Maryam Rahmanian/UPI WASHINGTON, Sept. 14 (UPI) — The U.S. government said it was offering more than 40 million acres for drilling opportunities in the central and eastern Gulf of Mexico. "As one of the most productive basins in the world, the Gulf of Mexico is a cornerstone of our domestic energy portfolio, offering vital oil and gas resources that further economic growth and continue to reduce our dependence on foreign oil," Abigail Ross Hopper, director of the Bureau of Ocean Energy Management, said in a statement. BOEM said sales for central and eastern acreage within the Gulf of Mexico mark the ninth and 10th auctions under a five-year lease plan ending in 2017. The lease for 42.1 million acres in the central Gulf of Mexico […]

Posted On : Published By : Tom Whipple
Category:

Gasoline Leads Oil Prices Lower

The price of crude oil fell Monday amid an ongoing production glut. NEW YORK—Gasoline futures slid to an eight-month low Monday on concerns that the end of the busy summer-driving season could lead to a glut of the motor fuel. Oil prices also fell on fresh indications that the war for customers in the global crude market hasn’t abated. Gasoline prices settled down 6.56 cents, or 4.8%, at $1.3043 a gallon, the lowest settlement since Jan. 15. Gasoline prices surged 46% in the first half of the year, as relatively low prices sparked a surge in demand globally. U.S. driving hit a record, and refineries around the world ran at unusually high rates to churn out enough gasoline to meet consumption. But gasoline demand typically declines in September, as consumers stop taking trips after the busy summer-driving season. Gasoline prices have erased their spring gains and are now down […]

Posted On : Published By : Tom Whipple
Category:

Scientists say it’s been 500 years since California has been this dry

A snowboarder threads his way through patches of dirt in Olympic Valley, California. Many Tahoe-area ski resorts have closed due to low snowfall as California’s historic drought continues. (Max Whittaker/Getty Images) Researchers knew California’s drought was already a record breaker when they set out to find its exact place in history, but they were surprised by what they discovered: It has been 500 years since what is now the Golden State has been this dry. California is in the fourth year of a severe drought with temperatures so high and precipitation so low that rain and snow evaporate almost as soon as it hits the ground. A research paper released Monday said an analysis of blue oak tree rings in the state’s Central Valley showed that the amount of mountain snow California relies on for moisture hasn’t been so low since the 1500s. That was around the time when […]

Posted On : Published By : Tom Whipple
Category:

Analysts expect US crude oil stocks fell 200,000 barrels last week

US commercial crude stocks are expected to have decreased 200,000 barrels in the week that ended Friday, a survey of analysts showed Monday. The US Energy Information Administration is scheduled to release its weekly data at 10:30 am EDT (1430 GMT) Wednesday. The EIA five-year (2010-14) average shows inventories fell 270,000 b/d barrels for the same reporting period. Crude stocks typically decrease through the summer until late September, when demand drops because of the autumn refinery turnaround season. However, this year’s refinery activity has slowed down since early August, suggesting an early start to the maintenance period. Crude runs have fallen five weeks in a row. For the week ended September 4, the amount of crude processed equaled 16.1 million b/d, which was 6% below the summer peak of more than 17 million b/d at the end of July. Analysts do not believe refinery activity picked up last week. […]

Posted On : Published By : Tom Whipple
Category:

North Dakota May Let More Oil Wells Be Temporarily Idled

WILLISTON, N.D., Sept 14 (Reuters) – North Dakota’s oil regulators said on Monday they may allow more wells to be temporarily abandoned, a step that would permit producers to delay fracking beyond the typical one-year window and prevent even more crude from flooding onto global markets. The change would fuel massive savings for oil producers in the state who have amassed a backlog of almost 1,000 wells that have been drilled but not completed with processes needed to get the oil flowing. The delays are designed solely to ride out the roughly 50 percent drop in crude prices since last year. Any regulatory change in North Dakota also would assuage market concerns about supply continuing to outstrip demand at a time when Iraq, Saudi Arabia and other OPEC members show little sign of curbing their own output. While no decision has been reached, the North Dakota Department of Mineral […]

Posted On : Published By : Tom Whipple
Category:

U.S. shale oil production to fall for 6th straight month: EIA

Unused oil tank cars are pictured on Western New York & Pennsylvania Railroad tracks outside Hinsdale, New York August 24, 2015. Total U.S. shale oil production for October is forecast to decline by 80,000 barrels per day to 5.21 million bpd, compared with 5.29 million bpd in September, according to data released on Monday by the U.S. Energy Information Administration. The drop in October – the first in five months not to be bigger than the previous month’s – was slightly less than the 80,200 bpd decline in September, data shows. Production in the Eagle Ford is expected to fall for a seventh consecutive month, by 62,000 bpd to 1.42 million bpd, according to the EIA’s monthly drilling productivity report. Oil production from the Bakken region of North Dakota is expected to fall 21,000 bpd to 1.18 million bpd in October. It is the fourth month consecutive declines. In […]

Posted On : Published By : Tom Whipple
Category:

America’s Shale Gas Supply Is Caught in its Longest-Ever Decline

America’s shale gas boom hasn’t exactly been booming lately. Natural gas production from the seven largest U.S. shale deposits will drop for a fourth straight month in October to average 44.784 billion cubic feet a day, the lowest since March, based on an Energy Information Administration forecast released Monday. That’s the longest streak of monthly declines in government data going back to 2007. The pullback follows a decade of surging gas production that created a glut of the heating fuel and sent prices plunging to record lows in some regions. The biggest declines forecast for October are in oil-rich deposits such as the Eagle Ford shale formation in Texas, where drillers are idling rigs in response to a collapse in crude prices. Pipeline constraints in Appalachia aren’t helping either. Yield from the Marcellus shale of the eastern U.S., the nation’s biggest gas field, will fall 0.5 percent, the EIA […]

Posted On : Published By : Tom Whipple