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China oil product exports could see big jump as quotas surge

China’s state-owned refiners could export up to 16.9 million mt (869,000 b/d) of refined products over August-December — 44% more than the volume exported in the first seven months of the year, an analysis of latest information from industry sources and official data showed. The Ministry of Commerce last week issued the fourth batch of export quotas for 2015 totaling 9.9 million mt of oil products — triple the volume approved in the third batch and taking the total volume allocated so far for 2015 to 28.65 million mt, up 47% year on year, an industry source said. The products covered under the export quota includes gasoil, gasoline, jet/kerosene and naphtha. Chinese state-owned refiners need quotas or licenses from the government before they can export refined products. These companies seek export quotas based on their requirements but they don’t necessarily have to use up the allocated quotas. The quotas, […]

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U.S. tight oil production decline

Nevertheless, U.S. tight oil production continued to climb through April. It has fallen since, but the EIA estimates that September production will only be down 7%, or about 360,000 barrels/day, from the peak in April. Actual or expected average daily production (in million barrels per day) from counties associated with the Permian, Eagle Ford, Bakken, and Niobrara plays, monthly Jan 2007 to September 2015. Data source: EIA Drilling Productivity Report. This is despite the fact that typically output from an existing well falls very quickly after it begins production. The EIA estimates that tight oil production from wells that have been in operation for 3 months or more has declined by 1.6 mb/d since April, as calculated by the sum of the EIA estimated monthly declines in legacy production from May to September. Legacy production change (month-to-month production change, in thousands of barrels per day, coming from wells in […]

Posted On : Published By : Tom Whipple
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U.S. Drivers Will Put Oil Prices in Reverse

It is nearly turnaround season, though not necessarily for your favorite baseball team. The greatest late-season surge in a quarter century is already in the books for the oil market. Through Monday, crude had its best three-day percentage gain since Iraq’s invasion of Kuwait in August 1990. The rebound was attributed to investors covering negative bets in the futures market following a six-and-a-half year trough and an easing of deep pessimism about China and the global economy. Oil futures gave back a chunk of those gains on Tuesday , though, after China’s official purchasing managers index fell to its lowest in three years and a similar one in the U.S. dropped to a two-year low . A final support to a bullish crude-oil thesis may crumble after U.S. government data on petroleum and product inventories are released Wednesday. Last week’s report showed that U.S. crude inventories declined by the […]

Posted On : Published By : Tom Whipple
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U.S. tight oil production decline

Number of active oil rigs in counties associated with the Permian, Eagle Ford, Bakken, and Niobrara plays, monthly Jan 2007 to July 2015. Data source: Nevertheless, U.S. tight oil production continued to climb through April. It has fallen since, but the EIA estimates that September production will only be down 7%, or about 360,000 barrels/day, from the peak in April. Actual or expected average daily production (in million barrels per day) from counties associated with the Permian, Eagle Ford, Bakken, and Niobrara plays, monthly Jan 2007 to September 2015. Data source: EIA Drilling Productivity Report. This is despite the fact that typically output from an existing well falls very quickly after it begins production. The EIA estimates that tight oil production from wells that have been in operation for 3 months or more has declined by 1.6 mb/d since April, as calculated by the sum of the EIA estimated […]

Posted On : Published By : Tom Whipple
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Two New Canadian Oil Sands Projects Started Despite Price Pain

CALGARY, Alberta, Sept 1 (Reuters) – ConocoPhillips and Husky Energy Inc announced key milestones in bringing two new oil sands projects online on Tuesday, underlining how some producers in the high-cost sector are boosting production even as crude prices tumble. The two projects will add around 178,000 barrels per day to the 2.3 million bpd already being produced from the oil sands, the world’s third largest crude reserves after Saudi Arabia and Venezuela. The Canadian Association of Petroleum Producers forecast in June that oil sands production to hit 3.1 million bpd in 2020. That forecast may be overstated however, as Imperial Oil has since delayed plans to expand its Kearl project by another 125,000 bpd. The start up announcements on Tuesday also come as around 900 oil company jobs were cut in Canada, 500 of those by ConocoPhillips, and the U.S. benchmark crude dropped more than 6 percent on […]

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Obama wants new $1 billion Arctic icebreaker by 2020

Obama is expected to say that the government should buy a heavy icebreaker by 2020, when routine Arctic marine transit is expected, instead of the previous goal of 2022. He also will propose to start planning for additional icebreakers. The White House said the move is required for safety in the changing Arctic and to keep up with Russia. The U.S. Coast Guard used to have seven icebreakers, but the fleet has dwindled to three creaky vessels, only one of which is a heavy duty vessel, the White House said. “Russia, on the other hand, has 40 icebreakers and another 11 planned or under construction,” the White House said. During the past year, Obama has taken steps to seal off parts of Alaska from new drilling, but environmental groups have strongly criticized a recent decision to allow Royal Dutch Shell to drill off the northwest coast of the state. […]

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Drillers Unleash ‘Super-Size’ Natural Gas Output

The U.S. may have even more—and much cheaper to get—supplies of natural gas than anyone imagined. The trick is applying supersize versions of the horizontal-drilling and fracking techniques that worked successfully elsewhere to an area that hasn’t seen this approach yet. The gains come from extending the lateral portions of wells by thousands of feet and pumping them full of enormous volumes of sand, chemicals and water to flush out more hydrocarbons. So far, the impressive results have been confined to a small area in a single Louisiana parish near the Texas border. But if the approach works across the giant Haynesville Shale, which spans 120 miles across both states, the era of low American gas prices could extend for decades into the future, experts say. “There’s a large likelihood that the United States will be enjoying very low gas prices for a very long time, maybe 20 years,” […]

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AAA: U.S. gas prices plummeting

Motor club AAA finds gas prices should move lower into upcoming U.S. holiday, though debt-conscious consumers may stay home this year. File photo by Brian Kersey/UPI WASHINGTON, Sept. 1 (UPI) — Bearish trends for crude oil prices and the resolution to problems at a major U.S. refinery pushed gas prices lower at a hastened clip, motor club AAA said. AAA reported a national average retail price for a gallon of regular unleaded gasoline for Tuesday at $2.46, down about eight tenths of a percent from the previous day and 5 percent less than the previous week. AAA, in a weekly retail market report, said the persistent decline of crude oil prices and the resolution of maintenance issues at BP’s refinery in Whiting, Ind., is behind the swift pace of decline in gasoline prices . "Despite the persistence of some regional refinery issues, average U.S. gas prices are falling at […]

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North Dakota gets energy transit grant

North Dakota gets federal grant to improve safer transport of energy products like crude oil. Photo by Steven Frame/Shutterstock WASHINGTON, Sept. 1 (UPI) — A grant from a federal safety regulator will help North Dakota invest in the infrastructure needed to transport oil safely and efficiently, a senator said. U.S. Sen. John Hoeven , R-N.D., said the federal Pipeline and Hazardous Materials Safety Administration granted the state about $200,000 to improve its ability to respond to incidents involving the transportation of hazardous materials like crude oil . "It’s important for us to invest in the right kind of infrastructure to move energy [resources] as safely and efficiently as possible, now and into the future," Hoeven said in a statement. "This grant will help us do just that." Hoeven, who serves on an energy committee in the U.S. Senate, said he’s been pushing an agenda that includes improvements in rail […]

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Canadian producer Penn West slashing jobs

Canadian oil and gas producer Penn West shedding more than 400 jobs to ensure durability during weak crude oil market. File photo by ekina/Shutterstock CALGARY, Alberta, Sept. 1 (UPI) — Canadian oil and gas producer Penn West Petroleum said it would cut more than 400 jobs, or around 35 percent of its workforce, to endure a weak oil market. The company said it was cutting capital spending, suspending dividends and "significantly" cutting costs through a 35 percent workforce reduction. President and Chief Executive Officer Dave Roberts said steps taken today will help the company endure an era of historically low crude oil prices. "Limiting our capital programs to the funds flow generated from our assets and suspending our dividend are necessary steps," he said in a statement. "We remain flexible and well positioned to move forward when oil prices improve." The company said it expects to save about $34 […]

Posted On : Published By : Tom Whipple