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Goldman, Commerzbank cut oil forecasts on oversupply

Goldman Sachs and Germany’s Commerzbank slashed their forecasts for oil prices on Friday, citing global oversupply and worries about top energy consumer China. U.S. investment bank Goldman, closely followed by many investors including commodities funds, said it expects oil prices to tumble further this year on rising OPEC production and resilient non-OPEC supply, which is seen outstripping demand. "The oil market is even more oversupplied than we had expected and we forecast this surplus to persist in 2016," Goldman said in a note titled "Lower for even longer". It said crude oil prices could fall as low as $20 a barrel, although this was not its "base case". Joining a long list of banks cutting price projections, Goldman Sachs lowered its 2016 forecast for U.S. crude to $45 a barrel from $57, and said it saw 2016 Brent prices at $49.50 a barrel, down from its earlier $62 forecast. […]

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Oil-Price Slump Could Force U.S., Non-OPEC Suppliers to Make Deep Cuts

American oil producers will be forced to make drastic cuts in 2016 because of stubbornly low crude prices, an influential energy monitor said Friday, giving Saudi Arabia a chance to regain some of its lost clout in global markets. Oil prices that last month reached their lowest levels since the financial crisis have “dimmed the prospects for a recovery in U.S. drilling activity,” the International Energy Agency said in its closely watched monthly oil market report. The agency said tight oil—a type of expensive-to-pump crude that has driven American production in recent years—would decline by 400,000 barrels a day in 2016, a fall that already began in July. Along with expected drops in Russian and North Sea output in 2016, production outside of the Organization of the Petroleum Exporting Countries could see the steepest cuts since the fall of the Soviet Union, the IEA said. The agency’s predictions are […]

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Oil Market Report

mb/d World Oil Demand *Please note that these Highlights are from the latest Oil Market Report, which is released in full to subscribers only – according to this schedule each month . Non subscribers get free access to the latest Highlights on this schedule, however the full Oil Market Report is released to the public two weeks after the report is released to subscribers. If you would like to receive the full report with accompanying charts and graphs on the day of publication please subscribe or contact the subscription manager . Oil prices sank to six-year lows in August as a supply overhang grew and concern deepened over the health of the global economy, especially in China. After rebounding on a slew of economic and fundamental data, prices turned volatile in September. Brent was last trading at $48.10/bbl with NYMEX WTI at $45.20/bbl. Oil’s latest tumble is expected to […]

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IEA: Most recent OMR shows oil markets tightening

Oil markets are tightening, as stockpiling gradually slows and inventories start to draw in the second half of 2016, the International Energy Agency forecast in its most recent monthly Oil Market Report. “Notable builds are still anticipated, but will be significantly lower than during the previous six quarters up to the second quarter of 2015 when global stocks rose by a notional 715 million b/d,” IEA said. Demand In this report, IEA said it expects global oil demand growth to climb to a 5-year high of 1.7 million b/d in 2015 before moderating to 1.4 million b/d in 2016, thanks to lower oil prices and a strengthening macroeconomic backdrop. These estimates are 210,000 b/d and 200,000 b/d, respectively, above last month’s report. “Higher estimates for 3Q15 demand, 400,000 b/d higher at 95 million b/d, were chiefly attributable to raised July numbers for the US, China, Europe, and Russia,” IEA […]

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World Bank Confident Funding to Back Climate-Change Deal Will Be Secured

MACTAN, Philippines—The World Bank’s special envoy on climate change on Friday expressed confidence that industrialized countries will open their wallets when they gather in Paris later this year to bankroll a global strategy to reduce greenhouse gas emissions. “There will be a finance package and it will be a generous one,” World Bank Vice President Rachel Kyte told The Wall Street Journal at the sidelines of the meeting of Asia Pacific Economic Cooperation ministers in this central Philippine island. Ms. Kyte said talks on the financing package are continuing but she declined to quote the potential size of the financing package. Multilateral financial institutions, including the World Bank, already provide annually a combined $28 billion for projects intended to help developing countries mitigate the impact of and adapt to climate change, she noted. French President François Hollande last month anchored a final deal on climate change during the November-December […]

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Antarctica to Melt Without Curbs on Fossil Fuels, Study Finds

Burning all the Earth’s remaining coal, oil and natural gas would trigger enough warming to melt the entire Antarctic ice shelf, eventually obliterating coastal regions around the world, researchers said in a report Friday. That worst-case scenario would be a long way off — several thousand years, according to computer simulations published by the journal Science Advances. Still, the results are a reminder of the potentially cataclysmic impacts of an Antarctic meltdown, according to the German, U.S. and U.K. researchers. About 1 billion people live in coastal areas that would be swamped if the entire ice sheet was lost, they said. “The west Antarctic ice sheet may already have tipped into a state of unstoppable ice loss, whether as a result of human activity or not,” Anders Levermann, of the Potsdam Institute for Climate Impact Research, said in a statement. “If we want to pass on cities like Tokyo, […]

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Fossil-Fuel License Limits Seen Viable Option to Emissions Cap

Limiting fossil-fuel supplies to combat climate change may be more attractive for governments than trying to negotiate a global emissions cap, according to Andy Howard, an adviser to Critical Resource Strategy & Analysis Ltd. Nations producing coal, oil and natural gas could protect revenue by applying “supply-side discipline” such as handing out fewer drilling licenses, Howard said by phone Wednesday. London-based commodities consultant Critical Resource last month set up a panel headed by former BP Plc chief executive officer John Browne to advise the fossil-fuel industry on United Nations climate talks. Even as nations and the energy industry produce less fossil fuel, “they can still make more money out of it” and help protect the climate as prices rise, said Howard, a former Goldman Sachs Group Inc. managing director. “If the industry could act in a disciplined way, it could operate profitably at a lower volume.” Andy Howard — […]

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Assad Regime Inflames Refugee Crisis

TRIPOLI, Lebanon—As hundreds of thousands of refugees flee Syria for Europe, the regime of President Bashar al-Assad has been coming down hard on those who have stayed behind, particularly people viewed as potential threats. Ahmed al-Hamid is one of them. The 37-year-old doctor said security agents picked him up in late 2013 for his role establishing field hospitals in opposition areas in Homs and Damascus. After six months in jail—where he said he was beaten with batons and whips while strapped to boards—Dr. Hamid was released by a sympathetic judge. Last year, he fled to nearby Lebanon, joining an exodus of professionals, dissidents and others who were driven out for being on the wrong side of the Syrian regime. “There is no order, per se, but all conditions are being put in place so that people do not dare go back,” says Dr. Hamid, a stocky man with a […]

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Exclusive: Iran to take Parchin military site samples with IAEA present – diplomats

U.S. Secretary of Energy Ernest Moniz, U.S. Secretary of State John Kerry, British Foreign Secretary Philip Hammond, Russian Foreign Minister Sergey Lavrov, German Foreign Minister Frank Walter Steinmeier, French Foreign Minister Laurent Fabius, Chinese Foreign Minister Wang… United Nations inspectors will be present with Iranian technicians as they take samples from a key military site, two Western diplomats said, undercutting an objection by U.S. Republicans to the nuclear deal between Iran and world powers. The diplomats were familiar with details of a confidential arrangement between Iran and the U.N. nuclear watchdog for inspections at the Parchin site, where some countries suspect nuclear weapons-related tests may have taken place. Iran has denied that allegation, but agreed to accept comprehensive International Atomic Energy Agency (IAEA) inspections of its suspect sites as part of the historic July deal in exchange for an easing of international sanctions. An August report by the Associated […]

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Next Steps in Putting Iran Nuclear Deal Into Effect

Photo President Obama at the White House on Thursday, discussing the Iran nuclear accord. Democrats cleared the way for the deal to go into effect after a key procedural vote in the Senate. Credit Stephen Crowley/The New York Times WASHINGTON — With Senate Democrats blocking passage of a resolution disapproving of the Iran nuclear deal, the attention will shift from the halls of Congress to the nations and international agencies that must put the accord into effect. Here’s what happens next. Q. What is the first thing that will happen? A. The agreement is to be formally adopted on Oct. 19 — 90 days after it was endorsed by the United Nations Security Council . That is the day Iran and the six world powers that concluded the accord — the United States, Germany, Britain, France, Russia and China — are to start taking steps to comply, although most […]

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U.S. House Votes Against Approving Iran Nuclear Deal

WASHINGTON—The House on Friday voted against approving the Iran nuclear agreement, as congressional Republicans sought to emphasize their united opposition to the deal, a centerpiece of President Barack Obama ’s foreign policy agenda. The 269-162 vote was aimed less at blocking the Iran deal, which already has enough support to be implemented, and more at laying the groundwork for challenges to the deal in coming years. Republicans had earlier hoped to undercut the deal by voting for a disapproval resolution, but those hopes vanished when Senate Democrats lined up enough support to block a disapproval-resolution vote on Thursday. Democrats in both chambers had also gathered enough support to sustain a veto had a disapproval resolution made it to the president’s desk. “This deal is far worse than anything I could have imagined,” said House Speaker John Boehner (R., Ohio.) “Our fight to stop this bad deal frankly is just […]

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Nigeria: NNPC Bows to Pressure, Lifts Ban on 113 Oil Tankers

(file photo). Photo: Premium Times The Nigerian National Petroleum Corporation (NNPC) has finally bowed to the pressure mounted by the International Association of Independent Tanker Owners (INTERTANKO) and lifted a ban on 113 foreign vessels, mostly very large crude carriers (VLCCs) into Nigeria’s territorial waters less than two months after the ban was imposed. Acting on the directive of President Muhammadu Buhari, NNPC imposed the ban shortly after Buhari assumed office over concerns that most of the tankers were complicit in incidents of crude oil theft from Nigerian oil terminals. INTERTANKO, whose members were mostly affected by the ban of the 113 vessels, is one of the largest groups in the shipping industry with 207 full members and 285 associate members, and a registered fleet of over 3,000 tankers of over 270 million DWT (deadweight). In his capacity as the then Group General Manager of NNPC in charge of […]

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Opposition in Venezuela Is Unsettled by Leader’s Sentence

Photo At a demonstration in Caracas on Friday, Lilian Tintori read a letter that her husband, Leopoldo López, an opposition leader, had written in prison. Credit Meridith Kohut for The New York Times CARACAS — A year ago Leopoldo López, a Venezuelan opposition leader, walked at the head of rallies of tens of thousands of people, calling for the exit of President Nicolás Maduro and setting off a wave of demonstrations and unrest as the country boiled with discontent. But on Friday, only a few hundred people showed up at a demonstration to support him, a day after he was convicted and sentenced to nearly 14 years in jail for his role in leading last year’s protests. The small size of the crowd told the story: The opposition finds itself discouraged and off balance even as it retains hopes of winning crucial legislative elections scheduled for December. “In Venezuela […]

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What’s 40 million tonnes of Chinese steel between friends?

A promotional sign adorns a stage at a BHP Billiton function in central Sydney August 20, 2013. BHP Billiton last month revised downwards its forecast of "peak steel" production in China, the world’s largest producer of the stuff. It will happen, BHP said, some time in the mid-2020s and the peak will be between 935 and 985 million tonnes, or 960 million in the middle of that range. Rio Tinto, by contrast, is sticking with its call that the peak will come around 2030 and will be around one billion tonnes. BHP’s shift of stance grabbed a lot of media coverage. After all, these are two of the world’s largest producers of iron ore and China is the world’s largest buyer of their product. For BHP and Rio and their shareholders "peak steel" in China is more than just an academic talking-point. When it comes and at what level […]

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What Will Drillers Do as Prices Fall? Depends Who You Ask

Goldman Sachs says the world has more oil than it had thought and expects prices to slip below $40 per barrel, and maybe lower, because the glut may linger deep into next year. On the same day, the International Energy Agency said production outside OPEC countries will drop sharply in 2016 with prices so weak. Goldman analyst Damien Courvalin says these cuts may not be enough. He lowered his forecast for 2016 to $45 per barrel from $57. He says prices could collapse to around $20 if production decreases too slowly. Oil markets been unusually volatile, with the price of crude down 26 percent in three months. Prices have risen or fallen more than 3 percent on 14 trading days during that stretch.

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U.S. Oil-Rig Count Falls in Latest Week

The U.S. oil-rig count fell by 10 to 652 in the latest reporting week, the second straight decline after six consecutive weeks of increases, according to Baker Hughes Inc. BHI -1.12 % The number of U.S. oil-drilling rigs, which is viewed as a proxy for activity in the oil industry, has fallen sharply since oil prices started falling last year. The rig count dropped for 29 straight weeks before climbing modestly in recent weeks. Despite recent increases, there are still about 59% fewer rigs working since a peak of 1,609 in October. According to Baker Hughes, the number of gas rigs declined by six to 196. The U.S. offshore rig count was 31 in the latest week, down two from last week and down 35 from a year earlier. For all rigs, including natural gas, the week’s total was down 16 to 848.

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

A general view of the Tesoro refinery in Carson, California February 2, 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 at refineries […]

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U.S. importing less Saudi oil – for now

U.S. President Barack Obama looks on as King Salman bin Abd alAziz of Saudi Arabia speaks during a bilateral meeting in the Oval Office of the White House. U.S. imports of Saudi Arabian oil are down, federal data show. Pool Photo by Olivier Douliery/UPI WASHINGTON, Sept. 11 (UPI) — Total U.S. imports of crude oil from Saudi Arabia for the week ending Sept. 4 are down roughly 15 percent from last year, U.S. federal data show. The U.S. Energy Information Administration reports Saudi Arabian oil accounts for roughly 17 percent of all crude oil imported into the United States, putting it at the No. 2 spot behind Canada. Total imports of Saudi crude for the week ending Sept. 4 were 1.06 million barrels per day, down 15.2 percent from the same week in 2014. Saudi oil imports are down 32 percent from the first week of September 2013. "U.S. […]

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EIA: Oil companies may cut spending further

Federal energy report finds rough road may be ahead for companies working in U.S. shale basins. Photo by photostock77/Shutterstock WASHINGTON, Sept. 11 (UPI) — Companies contributing most to U.S. onshore oil production are expected to cut capital spending as the weak oil market endures, a federal energy report said. West Texas Intermediate, the U.S. benchmark for crude oil prices, closed Thursday at $48.89 per barrel, more than 17 percent below the start of July and more than 50 percent below peak prices in June 2014. Most oil companies are cutting spending on exploration and production and shedding staff. Though some sectors are performing well, the economy in Texas , the No. 1 oil producer in the nation, is feeling pressure from the downward trajectory for crude oil prices. The U.S. Energy Information Administration analyzed financial data from 44 companies focused heavily on shale oil production in the United States. […]

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Bakken Rig Count at 69

Bakken Rigs The Bakken-Three Forks rig count dropped to 69 rigs running across our coverage area by end of the week on Friday. In recent Bakken news, North Dakota senator, Heidi Heitkamp, pushes back against the latest federal mandate to reduce methane emissions. Read more: Heitkamp Reacts to Methane Ruling The U.S. rig count fell by 16 this week, ending with 848 rigs running by midday Friday. A total of 196 rigs were targeting natural gas (down six from previous week) and 652 were targeting oil in the U.S. (10 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 70 are in ND alone. Bakken Oil & Gas Rigs The Bakken oil rigs were at 69 this week with Bloomberg reporting WTI oil prices trading at $45.19/bbl on Friday afternoon, a $1.59 decrease from the previous week. WTI-Brent decreased $.1.69 landing […]

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Output per miner-hour rises as smaller coal mines close

graph of coal productivity and number of U.S. coal mines, as explained in the article text Coal mining productivity increased in 2013, averaging 5.5 short tons per miner hour, reversing a trend of declining productivity since at least 2000. Preliminary data from the Mine Safety and Health Administration indicate a further increase in 2014. Improved productivity at the largest mines, as well as the shrinking number of smaller coal mines, contributed to the rise in overall productivity. U.S. coal producers improved mining productivity by 6.7% in 2013, reaching 5.5 short tons per miner hour. Nine out of the 14 U.S. coal supply regions , representing 79% of 2013 coal production, showed productivity gains in 2013, the most recent year with detailed productivity statistics. While some productivity gains result from improved mining technology, most of the productivity improvement is attributable to the closing of less-efficient mines with lower labor productivity. […]

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Oil Servicers Say ‘Fat Trimming’ Will Become New Norm

Oil Servicers Say Fat Trimming Will Become New Norm ABERDEEN, Scotland, Sept 11 (Reuters) – A slump in oil prices is forcing the oil and gas services industry for the first time in 15 years to trim costs in a way that executives say will create a lasting change away from their usual lavish way of doing business. Navigating a new environment in which oil prices have halved in a year and their customers are slashing investments, oil service firms face a rough ride. "The industry has been quite lazy in changing because oil prices have been helping us a lot," Samir Brikho, chief executive of oil service engineering company Amec Foster Wheeler, told Reuters. "At a time like this, you need to take a look at how you can take out the fat. Once we have done this we will never go back, this will become the new […]

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Ruble Extends Losses as Russia Seen Resuming Monetary Easing

The ruble declined as oil dropped and the Bank of Russia’s economic outlook bolstered speculation for more interest-rate cuts this year. The exchange rate weakened 0.6 percent to 68.043 per dollar by 2:14 p.m. in Moscow. Brent crude, the nation’s main export earner, declined 2.1 percent to $47.86. The central bank forecasts the economy will shrink by 3.9 percent to 4.4 percent in 2015, it said in a statement after keeping borrowing costs unchanged at 11 percent following five reductions since January. The decision was expected by all but three of 36 economists polled by Bloomberg. “It’s clear that the central bank hasn’t made a U-turn in its policy, but temporarily halted its easing cycle,” Tatiana Orlova, a Russia & CIS economist at Royal Bank of Scotland Group Plc in London, said by e-mail. “We continue to believe that the next policy move will be a cut.” The central […]

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Bank of Russia keeps key rate unchanged

The Central Bank of Russia keeps interest rate unchanged, but frets over trajectory of energy prices. Photo by DyMax/Shutterstock MOSCOW, Sept. 11 (UPI) — The Bank of Russia said Friday it would keep key interest rates unchanged, but said future momentum may depend on global energy prices. The bank’s Board of Directors said it was keeping the key rate at 11 percent annually because of higher inflationary risks and "persistent risks of considerable economy cooling." The Russian economy teetered on the brink of recession when entering fiscal year 2015. The Russian currency, the ruble, has been pressured by a weak economy in general and sanctions targeting the Russian energy sector. "The depreciated ruble will continue to put pressure on prices in the next few months," the bank said. Russian oil company Rosneft reported second-quarter profits at $1.99 billion, about 22 percent lower than the same period last year. The […]

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Statoil: Johan Sverdrup development in full swing

Norwegian energy company Statoil installs equipment needed to start production at giant Johan Sverdrup oil field. Photo courtesy of Statoil STAVANGER, Norway, Sept. 11 (UPI) — With the doling out of a new drilling platform contract, Norwegian energy company Statoil said development for the giant Johan Sverdrup field is moving swiftly. For an undisclosed sum, Statoil, acting on behalf of the project consortium, awarded a contract to engineering and construction company Kvaerner Verdal to deliver steel infrastructure needed for the drilling platform at the Johan Sverdrup field. A Norwegian metal worker in late June started cutting steel for the jacket, the tower support structure, for a riser platform used for Johan Sverdrup. Delivery and installation for the jacket for the drilling platform is slated for early 2018. "The Johan Sverdrup project activity will rise considerably in the time ahead as we take new steps in the development," Kjetel Digre, […]

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Oil Extends Weekly Drop on Glut as Goldman Cuts Price Forecasts

Oil deepened its weekly decline amid the global glut as Goldman Sachs Group Inc. trimmed its price forecasts on signs the surplus will persist. Futures slid as much as 2 percent in New York, paring Thursday’s 4 percent gain. U.S. crude inventories climbed a second week through Sept. 4 to keep supplies about 100 million barrels above the five-year seasonal average, according to the Energy Information Administration. The world’s oversupply is even bigger than Goldman thought and that could drive prices as low as $20 a barrel, the bank said in an e-mailed report Friday. Oil has fluctuated since slumping below $40 a barrel almost three weeks ago as concern over growth in China fueled volatility in global markets. A Senate vote paved the way for President Barack Obama to ease financial penalties for doing business with Iran, which may allow an increase in oil exports. U.S. stockpiles continue […]

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Oil Could Drop as Low as $20, Goldman Says

The global surplus of oil is even bigger than Goldman Sachs Group Inc. thought and that could drive prices as low as $20 a barrel. While it’s not the base-case scenario, a failure to reduce production fast enough may require prices near that level to clear the oversupply, Goldman said in a report e-mailed Friday. The bank cut its forecast for Brent and WTI crude through 2016 on the expectation that the glut will persist on OPEC production growth, resilient supply from outside the group and slowing demand expansion. “The oil market is even more oversupplied than we had expected and we now forecast this surplus to persist in 2016,” Goldman analysts including Damien Courvalin wrote in the report. “We continue to view U.S. shale as the likely near-term source of supply adjustment.” Goldman trimmed its 2016 estimate for West Texas Intermediate to $45 a barrel from a May […]

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Oil weakens as Saudi sees no need for oil summit to defend prices

A customer prepares to fill up his tank in a gasoline station in Nice December 5, 2014. Crude oil prices dipped on Friday and were poised for a weekly fall after news that top oil exporter Saudi Arabia sees no need for a producer summit to defend prices, partly offsetting a strong rally in the previous session. The front-month October contract for Brent, the global oil benchmark, shed 5 cents to $48.84 a barrel as of 0217 GMT after it settled up $1.31, or 2.8 percent, on Thursday at $48.89 a barrel. The U.S. crude October contract also lost 14 cents to $45.78 a barrel after it settled up $1.77, or 4 percent, at $45.92 a barrel. Saudi believes a summit of oil producing countries’ heads of states would fail to produce concrete action toward defending oil prices, sources familiar with the matter said on Thursday. The comments followed […]

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Oil prices fall as Asia’s leading economies slow further

An oil pump jack pumps oil in a field near Calgary, Alberta, July 21, 2014. Oil prices fell on Thursday as weak Japanese and Chinese economic data fueled concerns that low levels of investment could further erode already slowing global growth. Japan’s core machinery orders fell 3.6 percent in July, official data showed, much worse than a 3.7 percent increase expected by economists, and followed a 7.9 percent month-on-month decline in June. In Asia’s biggest economy China, the producer price index fell 5.9 percent in August from the same period last year, its 42nd consecutive month of decline and the biggest drop since the depths of the global financial crisis in late 2009, data showed on Thursday. With many economies facing headwinds, ANZ bank said global growth for 2016 and 2017 would hold around 3.5 percent, revised down from the 4 percent it had previously forecast. ANZ added that […]

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NYMEX October natural gas settles 3.2 cents higher after supportive storage report

The NYMEX October natural gas futures contract settled 3.2 cents higher at $2.683/MMBtu on Thursday, following a supportive storage report. "This storage report is not exactly surprising but offers hope to bullish traders," said Aaron Calder, an analyst with Gelber & Associates. "In mid-August we learned that power generators can marshal demand when conditions get sufficiently hot. Both last week and this week were hot and we are seeing that additional marginal demand in the storage reports. However once that weather based demand fades we expect market balance to return to its previously oversupplied levels." US natural gas in storage rose 68 Bcf to 3.261 Tcf in the week ended September 4, the US Energy Information Administration said Thursday. That was below consensus expectations of an injection between 72 Bcf and 76 Bcf. It was also lower than the 90-Bcf injection reported at this time in 2014, but higher […]

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OPEC Sees Weak Oil Prices Through 2015

DOHA, Qatar—The Organization of the Petroleum Exporting Countries has become more pessimistic about the future of oil prices this year amid plentiful supplies and softening demand from China, the group’s members said this week. Persian Gulf OPEC members, the leaders behind group’s new strategy of letting market forces determine prices while pumping more to maintain customers, now believe prices won’t go much higher than they are now, if at all this year. Brent crude, the international benchmark, was trading between $47 and $48 a barrel in London on Thursday afternoon. One Persian Gulf country official told The Wall Street Journal that members see Brent trading between $40 and $50 a barrel through the end of 2015. Gulf OPEC members had expected prices to bounce back firmly to the $70 to $80 range at the end this year. Brent oil prices crashed to $42 a barrel in August, the lowest […]

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IEA sees U.S. oil output collapsing next year on low prices

Lower oil prices will force non-OPEC producers including the United States to cut output by the steepest rate in more than two decades next year, rebalancing an oversupplied oil market, the International Energy Agency said on Friday. The IEA, which advises the world’s biggest economies on energy policy, said global oil demand was poised to climb to a five-year high this year thanks to lower prices. It steeply revised its outlook for demand for oil from the Organization of the Petroleum Exporting Countries. The report is one of the most bullish for OPEC since the group shocked markets last year by deciding against cutting production, choosing to fight for market share and depress the output of higher-cost producers such as the United States. "The big story this month is one of tightening supply, with the spotlight firmly fixed on non-OPEC," the IEA said in its monthly report. "Oil’s price […]

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IEA Sees U.S. Shale Oil Output Shrinking in 2016 on Price Slump

U.S. shale oil production will drop 9 percent next year as a crude price below $50 a barrel “slams brakes” on years of supply growth, the International Energy Agency said. “Oil’s downward spiral to fresh six-year lows below $50 a barrel has dimmed the prospects for a recovery in U.S. drilling activity,” the Paris-based IEA said in its monthly market report Friday. “Unless oil prices bounce back in coming months, supply is forecast to fall by 385,000 barrels a day next year to 3.9 million barrels a day.” The forecast is a turnaround for the IEA, which only two months ago predicted U.S. shale oil output would increase by 60,000 barrels a day in 2016. Oil supply from producers outside OPEC will make the biggest contraction next year since 1992 as Saudi Arabia’s strategy to defend market share by pressuring rivals with lower prices takes effect, according to the […]

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Oil Supply Outside OPEC to Fall Most Since 1992, IEA Forecasts

Oil supplies outside OPEC will decline next year by the most in more than two decades as the price rout curbs U.S. shale output, according to the International Energy Agency. Production outside the Organization of Petroleum Exporting Countries will fall by 500,000 barrels a day to 57.7 million in 2016, the Paris-based adviser said Friday in its monthly report. While fuel demand this year will be the strongest since 2010, record-high oil inventories in developed nations won’t start to diminish until the second half of next year, and the revival of Iranian exports with the removal of sanctions may swell supplies further, it said. Shrinking supplies outside OPEC show that Saudi Arabia’s strategy to defend the group’s market share by pressuring rivals with lower prices “appears to be having the intended effect,” the IEA said. Brent crude futures, a benchmark used around the world, slumped to a six-year low […]

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Non-Opec production faces biggest decline in more than 20 years

Sign up for quick access to a wealth of global business news, including: Non-Opec production faces biggest decline in more than 20 years Newspaper + Premium online Newspaper + Premium online Premium Full FT.com subscription Premium Full FT.com subscription Standard Full news & archive Standard Full news & archive Trial Try Premium online Trial Try Premium online Price Monthly Annual $66.30 $11.77 per week $53.00 $9.25 per week $36.00 $6.45 per week $1.00 for 4 weeks $1.00 for 4 weeks FT Alphaville plus selected FT blogs yes yes yes yes Unlimited FT.com article access yes yes yes yes Unlimited mobile and tablet access yes yes yes yes Unlimited fast FT yes yes yes yes 5 year company financials archive yes yes yes yes The LEX column yes yes no yes ePaper access yes yes no yes Three exclusive weekly emails yes yes no yes Daily newspaper delivery yes no […]

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Iran Gets Ready to Sell to the World

An Iranian oil tanker in Bandar Abbas, Iran, on July 4, 2012. Photographer: Thomas Erdbrink/The New York Times via Redux Before the most recent round of sanctions went into effect three years ago, Iran was able to sell oil to 21 countries. By mid-2012, that was down to six: China, India, Japan, South Korea, Taiwan, and Turkey. Rather than immediately pull back on production, and risk damaging oil wells by slowing them down, Iran decided to store its excess crude. As it scrambled to build onshore tanks, the government loaded millions of barrels onto its suddenly out-of-work fleet of crude-carrying vessels. The Iranians eventually reduced their oil output by about a third, to a low of 2.5 million barrels a day in mid-2013, according to data compiled by Bloomberg. As exports fell to 1 million to 1.5 million barrels a day, Iran kept filling its tankers with oil it […]

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Iraq to seek up to $500 million in loans from Islamic Development Bank

The country’s 2015 federal budget empowers the ministry of finance to draw additional financing from sources including the IDB, the prospectus said. Iraq will seek up to $500 million in loans from the Jeddah-based Islamic Development Bank (IDB) to help cover its projected deficit, complementing the country’s return to the international debt market , according to the bond’s prospectus. Baghdad wants to raise up to $6 billion in a series of dollar-denominated bonds, Iraq’s first in nine years, to fund salaries as well as infrastructure projects in the oil and gas, electricity and transportation sectors. The country’s 2015 federal budget empowers the ministry of finance to draw additional financing from sources including the IDB, the prospectus said. Out of the $500 million, $225 milion would be used for the development and renovation of a major trade corridor that links Iraq with neighbouring countries, the document said. The IDB originally […]

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Sanctions Debate Emerges From Shadow of Iran Nuclear Accord

WASHINGTON — President Obama, in advance of his victory in Congress on Thursday on the Iran nuclear deal, focused on centrifuge numbers, uranium stockpiles and the breakout time to build a bomb. But now, as the agreement is carried out, he will face a new battle over how stringently to impose economic sanctions on Iran. To reward Iran for imposing constraints on its nuclear program , the United States agreed to lift many of the crippling sanctions that have blocked the country’s integration into the world economy. But to win over wary Democrats, Mr. Obama promised that he would maintain — and perhaps even increase — sanctions to punish Iran for terrorism, human rights abuses and other “ destabilizing activities in the region .” Many lawmakers have indicated they would like to go further, and they are considering legislative proposals that include renewing the current sanctions against foreign companies […]

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Democrats Hand Victory to Obama on Iran Nuclear Deal

Photo The leading proponents of the Iran deal: President Obama and Secretary of State John Kerry. Credit Stephen Crowley/The New York Times WASHINGTON — Senate Democrats delivered a major victory to President Obama when they blocked a Republican resolution to reject a six-nation nuclear accord with Iran on Thursday, ensuring the landmark deal will take effect without a veto showdown between Congress and the White House. A procedural vote fell two short of the 60 needed to break a Democratic filibuster . It culminated hours of debate in the Senate and capped weeks of discord since the United States, Britain, France, Germany, Russia and China announced the agreement with Iran in July. The debate divided Democrats between their loyalties to the president and to their constituents, animated the antiwar movement on the left and exposed the diminishing power of the Israeli lobbying force that spent tens of millions of […]

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Senate rejects attempt to derail Iran deal in victory for Obama

Congressional Republicans are vowing to continue their efforts to combat the Iran nuclear deal even if Democrats successfully block a resolution disapproving of the agreement. (AP Photo/J. Scott Applewhite) Senate Democrats on Thursday blocked a Republican effort to scuttle the Iran nuclear deal, delivering a major victory to the Obama administration. It has become clear in recent days that the White House can prevent Congress from immediately rejecting the deal, but the successful filibuster of the resolution of disapproval ensures that President Obama won’t have to rely on his veto pen to preserve a major piece of his foreign policy agenda. The vote on the procedural motion was 58 to 42 and 60 votes were needed to consider the resolution attacking the agreement. The debate over the highly controversial agreement struck this summer between Tehran, the United States and other world powers is not over with House Republicans promising […]

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Honor ceiling, Iran tells OPEC

OPEC members, notably Iran, are ignoring production agreements to the detriment of oil prices, Iran’s Oil Ministry says. File photo by Maryam Rahmanian/UPI TEHRAN, Sept. 10 (UPI) — The Organization of Petroleum Exporting Countries will have to review production levels to make room for Iran or face consequences, Iran’s Oil Ministry said. An opinion piece published by SHANA, the Oil Ministry’s official news website, said crude oil markets are skewed toward the supply side by 2 million barrels. Once all sanctions pressures ease, Iran could add another 1 million barrels of oil per day to the global marketplace almost immediately, it said. Iranian Oil Minister Bijan Zangeneh said his country could become the second-largest producer in the Organization of Petroleum Exporting Countries, after Saudi Arabia, within seven or eight months of sanctions relief. The minister said Iran will increase net oil production by more than 1.5 million bpd, bringing […]

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Saudi sees no need for oil summit, best leave market alone: sources

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. Top oil exporter Saudi Arabia sees no need to hold a summit of producing countries’ heads of state if such discussions would fail to produce concrete action towards defending oil prices, sources familiar with the matter said on Thursday. The comments followed a meeting of Gulf Arab oil ministers with Qatar’s emir in Doha, at which a Venezuelan proposal for an OPEC and non-OPEC summit was discussed. Oil prices have more than halved since summer last year on an oversupplied market as well as a decision by OPEC to defend market share and discourage competing supply sources, rather than cut its output in the face of cheaper crude. Riyadh believes it is best not to interfere in the market at present, the sources told Reuters on condition […]

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Iraq’s forex reserves near $60 bln as oil prices fall – central bank governor

* Lower oil prices have hit reserves, budget * No threat seen to local currency peg * Banking reforms to include privatisation BAGHDAD, Sept 8 (Reuters) – Lower oil revenues have cut Iraq’s foreign currency reserves to about $60 billion, the central bank governor said on Tuesday, enough to cover about 18 months worth of imports for OPEC’s second-largest oil producer. The plunge in oil prices since last year and Iraq’s fight against Islamic State militants have put severe pressure on its finances. The government has projected a fiscal deficit of about $25 billion this year, in a budget of roughly $100 billion. Those factors have also chipped away at international reserves, which fell to $66 billion at the end of 2014 from $78 billion at the end of 2013, according to the International Monetary Fund. But Ali al-Alak told Reuters that a drop in dollar-denominated expenditures has also […]

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Israel’s 300 Days of Sun No Help as Offshore Gas Eclipses Solar

Yosef Abramowitz, the developer of the Ketura solar field. After struggling to grow citrus trees on a stretch of parched desert, Israel’s Kibbutz Ketura instead devoted the land to harvesting the country’s most abundant resource: sunshine. Yet as the kibbutzniks seek to expand their solar installations, the government is proving almost as formidable an obstacle as the scorched soil ever was. “Israel has the technology and plenty of sunshine, but the government is completely ignoring the renewables industry,” said Yosef Abramowitz, a solar energy advocate who helped found Arava Power Co., the developer of the Ketura field. With more than 300 days of sunshine per year and a world-class tech sector, Israel should be a hotbed of solar, but it has lagged behind places such as cloudy Germany and the rainy Netherlands. That’s because in recent years, geologists have discovered huge gas fields just off Israel’s coast, making the […]

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Italy’s Eni sees Cyprus role in Egyptian gas development

Eni Chief Executive Officer Claudio Descalzi met in the Cypriot capital, Nicosia, with President Nicos Anastasiades to discuss the potential for future cooperation. Photo courtesy of Eni. NICOSIA, Cyprus, Sept. 10 (UPI) — Italian energy company Eni said the republic of Cyprus could serve as a strategic energy hub and a possible conduit for future Egyptian natural gas supplies. Eni Chief Executive Officer Claudio Descalzi met in the Cypriot capital, Nicosia, with President Nicos Anastasiades to discuss the potential for future cooperation . The Italian company said Cyprus could play a role in the near future in a scenario involving the recent gas discovery made off the coast of Egypt. "Eni believes in the significant synergies of joint development in the entire area of the eastern Mediterranean," the company said in a statement. "This area could be of crucial strategic importance as a gas hub for the whole region […]

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As a Boom Fades, Brazilians Wonder How It All Went Wrong

Photo Applicants at a government-run job center in São Paulo on Thursday. Brazil’s unemployment rate reached a five-year high, 7.5 percent, in July. Credit Andre Penner/Associated Press BRASÍLIA — The president of Brazil should have been ecstatic. She had just won re-election after an intense campaign in which she fiercely defended her role in making Brazil , for a few fleeting years, a rising star on the global stage. But in the days after her victory last October, President Dilma Rousseff was worried, confronted in private deliberations with her closest advisers by signs that Brazil’s triumphs were at risk of coming undone. “We went too far,” Aloízio Mercadante, Ms. Rousseff’s chief of staff, acknowledged publicly this month, describing the sense of alarm as the dust settled after the election and Ms. Rousseff and her aides grappled with the weaknesses in Brazil’s economy. It was not just the drop in […]

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Venezuelan Opposition Leader Is Sentenced to Prison Over a Protest

Photo Leopoldo López in February. Credit Juan Barreto/Agence France-Presse — Getty Images CARACAS, Venezuela — A judge on Thursday found the Venezuelan opposition politician Leopoldo López guilty of inciting violence and other charges stemming from his leading role in a large antigovernment protest, according to government television reports. Mr. López, a Harvard-educated former mayor of a wealthy section of Caracas, was sentenced to more than 13 years in prison, the television reports said. Critics said the trial was politically motivated and lacked basic guarantees of due process. Lawyers for Mr. López said they were barred from presenting any witnesses or evidence at the trial. “This has been a farce,” said José Miguel Vivanco, Americas director of Human Rights Watch , speaking by telephone from Washington. “It’s a kind of a caricature of a judicial procedure and in violation of fundamental principles of due process, of presumption of innocence.” The […]

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Like it or not, China’s crude oil futures will be a global benchmark

Labourers work under storage tanks at a refinery in Suining, Sichuan province October 22, 2009. China’s push to establish a crude derivatives contract has been met with early scepticism, but oil executives say the country’s growing economic influence means a third global crude benchmark is inevitable. A derivatives contract would give the Shanghai International Energy Exchange, known as INE, a slice of an oil futures market worth trillions of dollars, offering a rival to London’s Brent and U.S. West Texas Intermediate (WTI). And while others have tried and failed, China brings its might as the world’s biggest oil buyer, a strong dose of political will and the alignment of its financial and banking system for a yuan-denominated contract. "The energy industry is still manned, literally, by people from the West. But the world moves on, and there’s a change of guard," said a senior market executive, speaking on the […]

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China leading world towards global economic recession

A “hard landing” for the Chinese economy will likely lead the world into a recession in the next year, Citi’s global economics team has warned. Analysts at the Wall Street bank believe that a slowdown concentrated in emerging markets will drag down demand and see economic activity fall well below its potential across the world. They anticipate the global economy to slide into recessionary territory during next year, and remain there for most of 2017. The chance of such a global recession now stands at 55pc, staff estimated. Citi assigned a 15pc probability to the risk of a “severe recession”, in which the global economy enters a boom, overheats, and subsequently falters in dramatic fashion. Willem Buiter, global chief economist at Citi and a former Bank of England rate setter, said “that there is a high and rising likelihood of a Chinese, emerging market and global recession playing out”. […]

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