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Low natgas prices, high utility stockpiles weigh on US railroad coal volumes: executives

With myriad headwinds driving down coal shipments this year, officials with Class 1 US railroads painted a dim picture of their coal business Wednesday while speaking at the Cowen and Company 8th Annual Global Transportation Conference in Boston. In presentations broadcast online, officials with CSX, Northern Southern, Union Pacific, Kansas City Southern and Genesee & Wyoming sited low natural gas prices, mild summer weather and high utility stockpiles as the primary causes for a drop in demand. Fredrik Eliasson, CSX’s chief sales and marketing officer, said the railroad will lose about $400 million in coal business this year compared with 2014 and by the end of this year about $1.3 billion of coal revenue will have "disappeared" over the last four years. "I think it’s more and more realistic to think that where we are from a coal perspective, we’re not going to go back to kind of the […]

Posted On : Published By : Tom Whipple
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Low U.S. gasoline prices are supercharging fuel sales

A car is filled with gasoline at a gas station pump in Carlsbad, California August 4, 2015. As the summer driving season ends, U.S. gasoline prices have fallen to the lowest level for the time of year since 2004, wiping out the effect of more than a decade of rising fuel bills. The average retail price of gasoline across the United States was just $2.53 per gallon on Monday, including federal, state and local taxes, according to the U.S. Energy Information Administration. Retail prices have fallen by $1 per gallon, approximately 30 percent, compared with the same time last year and have not been this low at the end of the driving season since 2004 ( link.reuters.com/mex55w ). Gasoline prices are seasonal, reflecting higher demand in summer than winter and the limited capacity of the refining system. Over the last decade, gasoline prices have generally fallen on average by […]

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Cheap Russian Gas Tempts EU Buyers as LNG Import Growth Stalls

Europe lowered purchases of liquefied natural gas for a third month in August as buyers boosted purchases of oil-linked fuel through pipelines from Russia. LNG imports by 10 nations in the region that receive the tanker-delivered fuel dropped 3.4 percent from a year earlier in August, after reaching a two-year high in March, according to data from Genscape Inc. Russian pipeline supplies soared about 20 percent from a year earlier in August, remaining at the highest level this year, tracking declining crude prices, according to data from Gazprom PJSC, the world’s biggest gas producer. Europe, which imports as much as 70 percent of its gas needs, has increased shipments from Russia as contract prices declined because they follow crude with several months delay. Traders bought more LNG as they waited for pipeline gas prices to drop further in the third quarter, encouraged by a slump in Asian LNG prices […]

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Withering Reserve Buffer Forces Russia to Waive Key Budget Rule

Russia is overhauling its approach to crafting the budget next year to safeguard reserves, highlighting the challenges it faces in steering the recession-hit economy through a downturn in oil prices. Russia used 900 billion rubles ($13 billion) in the first eight months from the Reserve Fund, one of its two sovereign wealth funds, to cover the deficit, Finance Minister Anton Siluanov said Wednesday at a government meeting in Moscow. The non-oil shortfall, the gap excluding revenue from the energy industry, was 11 percent of economic output in the first half, the widest in 10 years, according to Siluanov. To temper the effects of the unfolding crisis on public finances, the government is suspending the so-called budget rule in 2016, a week after announcing plans to drop three-year fiscal plans in favor of a one-year program. The rule, which went into effect in 2013 and sought to cap public spending […]

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British energy sector bracing for downturn

British energy sector should brace for further staff cuts, industry body warns in an annual report. File photo by Maryam Rahmanian/UPI LONDON, Sept. 9 (UPI) — The British energy sector should brace for more staff reductions as companies take steps to endure the weak crude oil market, industry body Oil & Gas U.K. said. The industry’s lobbying group in its annual report said new spending in exploration and production is expected to fall by up to $6 billion per year over the next three years for its lowest levels since the 1970s. "This great industry of ours is facing very challenging times," the group’s chief executive, Deirdre Michie, said in a statement. Michie’s group in an early 2015 report said the market outlook was "bleak." The government’s overseer, British Oil and Gas Authority, this week called on companies to consider "all possible alternatives" to layoffs. Job losses in the […]

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Oil markets rise as Asian stocks soar

A pump jack is seen at sunrise near Bakersfield, California October 14, 2014. Crude oil prices stabilized on Wednesday as Asian stock markets caught a tailwind from a strong performance in the United States and Europe, although fuel markets remained generally dogged by oversupply. Asian shares extended a global rally on Wednesday, with markets in China stabilising and Japanese stocks posting their biggest one-day gain since the height of the global financial crisis in 2008, and traders said the more upbeat sentiment had flowed into oil markets. The Brent global crude benchmark was trading at $49.64 per barrel at 0654 GMT, up 12 cents from its last settlement after jumping 4 percent in the previous session. "Stabilisation in Chinese equity markets has… played an important role," ABN Amro said on Wednesday, referring to firming Brent. In Japan, weekly crude and refined products statistics showed stable utilization rates and stock […]

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Oil Prices Ride Gains in Asian Markets as Sentiment Improves

By Eric Yep Oil prices moved into positive territory with small gains in Asian trade Wednesday, buoyed by stronger sentiment across financial markets in the region. Chinese equity markets, which have been a source of volatility and uncertainty for oil and commodities prices, were broadly higher, tracking an overnight rally in U.S. stock markets. The Shanghai Composite Index was last up by 1.7%. "Oil markets continue to be driven by everything but fundamentals," consulting firm Energy Aspects wrote, adding that equity markets and macroeconomic data are in the driving seat amid seasonally low liquidity. On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at $46.15 a barrel at 0336 GMT, up $0.21 in the Globex electronic session. October Brent crude on London’s ICE Futures exchange rose $0.24 to $49.76 a barrel. Oil prices have fallen by around 14% so far this year, and […]

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U.S. Crude Prices Stay in Negative Territory; Brent Crude Rises 1.8%

LONDON—International oil benchmarks diverged on Tuesday as U.S. prices caught up with the previous day’s drop in Brent crude when U.S. markets were shut for a holiday, but behind the split the market remained focused on a recurring theme, the Chinese slowdown. On Tuesday, worse than expected trade data out of China added to fears of the slowdown in the world’s No. 2 oil consumer. Oil prices dropped to more than six-year lows last month following a slew of weak economic readings, a slide in the Chinese stock market and continued concerns about oversupply . “We experience further sell-off in [U.S.] crude oil as bearish Chinese data verified our recent concerns about how weak the Chinese economy has become,” said Myrto Sokou, analyst at Sucden Financial Research. Meanwhile, robust German exports data provided some support for Brent, the global oil benchmark, Mrs. Sokou added. Exports from Europe’s biggest economy […]

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Democratic Support for Iran Nuclear Deal Reaches Critical Threshold

Sen. Ron Wyden (D., Ore.) said Tuesday he would endorse the Iran nuclear deal. WASHINGTON—President Barack Obama on Tuesday crossed a key threshold in building support for the Iran nuclear deal , winning the backing of enough Senate Democrats that he could avoid having to use a veto to advance the accord. The new support, of 42 senators, means a shift in focus in the debate over the agreement, which was reached in Vienna in July. What had been a struggle to win over undecided lawmakers turned Tuesday into wrangling over procedure. Senate Majority Leader Mitch McConnell (R., Ky.) had been planning a formal floor debate over the Iran deal. But Senate Minority Leader Harry Reid (D., Nev.) now has enough support to block the legislation—technically, a resolution disapproving the deal—on procedural grounds, and he worked Tuesday to keep Democrats in line behind the strategy. Such a move would […]

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Iran awaits Austrian energy investments

Iran welcomes Austrian president and representatives from energy company OMV to review post-sanctions trade relations. File photo by Maryam Rahmanian/UPI TEHRAN, Sept. 8 (UPI) — Iran is preparing to welcome Austrian oil and natural gas company OMV back to the energy sector as sanctions pressure eases, a deputy Iranian minister said. Austrian President Heinz Fischer arrived Monday in Tehran, leading business delegates to the country to review potential trade relations with the Islamic republic. Amir-Hossein Zamani-Nia, the Iranian deputy oil minister in charge of international affairs, told the oil ministry’s officials news site SHANA, the Iranian energy sector was opening its doors to investors . "Using new technologies, OMV is ready to double production of Iran’s oil and gas fields through enhanced oil recovery and improved oil recovery methods," he said, without specifics. SHANA reports Rainer Seele, the chief executive officer at OMV, met Tuesday with Oil Minister Bijan […]

Posted On : Published By : Tom Whipple