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Citigroup Sees U.S. Oil Output Losing 500,000 Barrels a Day

Photographer: Martin Divisek/Bloomberg A funding squeeze threatens to cut U.S. oil output by as much as half a million barrels a day by the end of the year, with shale producers among the worst affected, Citigroup Inc. said. “Capital markets thus far have plugged shale’s funding gap but are showing signs of tightening, with impacts for drilling, oil supply and global prices,” Richard Morse and Ed Morse, analysts at Citigroup in New York, said in a note. Access to high-yield credit markets for debt-strapped producers is “sharply contracting,” they said. High-cost oil producers in the U.S. have been forced to scale back in the past year after members of the Organization of Petroleum Exporting Countries decided to maintain output to defend their market position. U.S. crude prices have dropped almost 40 percent since OPEC announced its policy change in November to trade at about $45 a barrel Wednesday. “The […]

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Contain Iran with oil, U.S. export backers say

Contain Iran with a decision to lift the ban on U.S. crude oil exports, supporters say. Photo by Ali Mohammadi/UPI WASHINGTON, Sept. 9 (UPI) — With Iran expecting to return to the global energy market, U.S. allies need a reliable source of crude oil in the way of exports, a production supporter said. The House Foreign Affairs Committee scheduled hearings Wednesday on the implications of a nuclear agreement reached in July between Iran, the five permanent members of the U.N. Security Council, plus Germany. Supporters of the agreement, which gives Iran widespread sanctions relief in exchange for nuclear assurances, describe it as a victory for diplomacy. Opponents worry about potential national security concerns for the United States and its allies in Israel. George Baker, executive director of the Producers for American Crude Oil Exports, said lifting a 1970s ban on domestic crude oil exports would send a de facto […]

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U.S. residential solar capacity booming

U.S. solar industry report finds more residential use and momentum spreading across more U.S. states. Photo by Craig Russell/Shutterstock WASHINGTON, Sept. 9 (UPI) — With development spreading, the U.S. residential solar power market set a record during the second quarter with new installations, an industry report said. A report from the Solar Energy Industries Association with support from green energy market adviser GTM Research finds second quarter residential solar capacity grew 70 percent year-on-year to 473 megawatts. The report finds that 10 states have installed more than 10 MW of solar power during the second quarter, up from the four reported during second quarter 2013. The Lawrence Berkeley National Lab published a survey in August of about 80 percent of all U.S. residential and non-residential photovoltaic systems installed through 2014 and found national median installed prices declined 9 percent year-on-year for residential systems, 10 percent for small-scale, non-residential systems, […]

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U.S. Oil Production to Fall, EIA Says

Government forecasters on Wednesday said U.S. oil production fell to a nearly one-year low and that low crude prices are likely to keep U.S. production falling through 2016. The U.S. Energy Information Administration, in its monthly short-term energy outlook, said that production fell by 140,000 barrels a day in August from the prior month. Production averaged 9.6 million barrels a day at its peak in April, the highest level since 1971, and has steadily declined since then to 9.1 million, the lowest since September. Oil traders have been closely focused on U.S. production in recent months, after a global glut of crude oil sent prices plunging in 2014. With the Organization of the Petroleum Exporting Countries producing above its target of 30 million barrels a day, investors say U.S. production needs to fall to make the market less oversupplied. The agency has pushed back its expectations for a U.S. […]

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Federal Court Denies States’ Request to Temporarily Block EPA Carbon Rules

WASHINGTON—A federal court denied a request by more than a dozen states on Wednesday to temporarily block the Obama administration’s carbon regulations while they mount a full legal challenge to the rules. The decision is an early victory for the Environmental Protection Agency, which completed the rules last month calling for carbon emissions from power plants to be cut 32% by 2030 from 2005 levels . The regulations are the cornerstone of President Barack Obama ’s climate plan, and Wednesday’s ruling is an early legal salvo in what is expected to be a yearslong court battle over Mr. Obama’s climate agenda. Last month, 15 states asked the U.S. Court of Appeals for the District of Columbia to issue an emergency stay blocking the rules , noting that they would be required “to spend significant and irrevocable sovereign resources now” to be in a position to meet the initial deadline […]

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US Cuts Crude Output Forecast as Rout Weakens Shale Boom

(Bloomberg) — The collapse of oil prices will have a slightly bigger impact on U.S. crude production this year and the next than previously estimated, the Energy Information Administration said. The agency reduced its output forecast for this year by 1.5 percent to 9.22 million barrels a day, according to its monthly Short-Term Energy Outlook. It cut the 2016 forecast to 8.82 million from 8.96 million last month. “U.S. monthly crude oil production is expected to decline through the middle of next year in response to low oil prices,” EIA Administrator Adam Sieminski said in an e-mailed statement. “Current low oil prices are making some U.S. oil production less profitable.” America’s shale drillers have sidelined more than half their rigs since October as they confront tumbling prices. The number of active oil rigs in the U.S. fell by 13 to 662 last week, according to data compiled by Baker […]

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U.S. crude output to fall 1 million barrels in 2016 from 2015 peak: EIA

Stacked rigs are seen along with other idled oil drilling equipment at a depot in Dickinson, North Dakota June 26, 2015. U.S. oil production is set to fall slightly farther than expected a month ago, the U.S. government said on Wednesday, in a sign the year-long slump in global prices is weighing more heavily and for longer than expected on the country’s shale boom. 2016 U.S. crude oil production is expected to fall by 400,000 barrels per day to 8.96 million bpd, according to data from the U.S. Energy Information Administration. Last month, the energy agency also forecasted a decline of 400,000 bpd, but at an output of 9.32 million bpd. While much of the decrease is likely a result of recently revised government forecasts showing downward supply revisions for the first five months of the year, data from the EIA’s short term energy outlook showed that U.S. oil […]

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An Energy Firm’s Collapse Casts Ominous Sign Over Mortgage Bonds

A pair of office towers in Tulsa, Oklahoma, is giving commercial real estate investors more reason to worry that the collapse in oil prices is starting to infect their market. The biggest tenant, oil and gas producer Samson Resources Corp., vacated one of the more than a dozen floors it occupied, according to a report from the firm that services a $45 million mortgage on the buildings known as the Williams Center Towers. Samson, which is preparing to file for bankruptcy protection this month, has indicated it will abandon another floor next year, and its lease gives it the right to withdraw from more space after that, according to the report. Samson’s shrinking footprint is laying bare the risks faced in cities that boomed amid the U.S. shale revolution — and are now the most vulnerable to the commodities rout. That’s increasing concern in the market for commercial mortgage […]

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U.S. Oil Production to Fall, EIA Says

Government forecasters on Wednesday said U.S. oil production fell to a nearly one-year low and that low crude prices are likely to keep U.S. production falling through 2016. The U.S. Energy Information Administration, in its monthly short-term energy outlook, said that production fell by 140,000 barrels a day in August from the prior month. Production averaged 9.6 million barrels a day at its peak in April, the highest level since 1971, and has steadily declined since then to 9.1 million, the lowest since September. Oil traders have been closely focused on U.S. production in recent months, after a global glut of crude oil sent prices plunging in 2014. With the Organization of the Petroleum Exporting Countries producing above its target of 30 million barrels a day, investors say U.S. production needs to fall to make the market less oversupplied. The agency has pushed back its expectations for a U.S. […]

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Short-Term Energy Outlook

Highlights North Sea Brent crude oil prices averaged $47/barrel (b) in August, a $10/b decrease from July. This third consecutive monthly decrease in prices likely reflects concerns about lower economic growth in emerging markets, expectations of higher oil exports from Iran, and continuing growth in global inventories. Crude oil price volatility increased significantly, with Brent prices showing daily changes of more than 5% for four consecutive trading days from August 27 to September 1, the longest such stretch since December 2008. EIA forecasts that Brent crude oil prices will average $54/b in 2015 and $59/b in 2016, unchanged from last month’s STEO. Forecast West Texas Intermediate (WTI) crude oil prices in 2015 and 2016 average $5/b lower than the Brent price. The current values of futures and options contracts for December 2015 delivery ( Market Prices and Uncertainty Report ) suggest the market expects WTI prices to range from […]

Posted On : Published By : Tom Whipple