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Crude oil falls after U.S. growth figures disappoint

A gas station worker fuels a vehicle in Tokyo August 26, 2015. Crude futures dropped in Asian trading on Friday after the release of a report showing that U.S. economic growth had slowed sharply, reinforcing concerns about sluggish demand in a world awash with oil. U.S. economic growth braked sharply in the third quarter as businesses cut back on restocking warehouses to work off an inventory glut, data showed. Both of the main crude benchmarks are on track to post their first weekly gains in three weeks, but with oil still being added to inventories, prices are likely to be rangebound in the coming weeks, traders and analysts said. U.S. crude was down 17 cents at $45.89 a barrel at 0407 GMT, after rising 12 cents in the previous session. The benchmark is on track to post a gain of 2.9 percent this week. Brent crude fell 9 cents […]

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Oil Snags Small Rally After Rig Numbers Drop Again

Oil prices had a small rally in the afternoon after data showed further cuts to the number of rigs working U.S. oil fields. The U.S. oil-rig count dropped by 16 to 578 in the latest week , the ninth consecutive week of declines, according to Baker Hughes Inc. BHI 0.17 % There are now 64% fewer rigs from a peak of 1,609 in October 2014, which some expect to lead to lower production, though it has yet to make a major impact. December crude oil settled up 53 cents, or 1.2%, to $46.59 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, gained 76 cents, or 1.6%, to $49.56 a barrel on ICE Futures Europe. “I don’t think these prices on oil or natural-gas are sufficient to meet long-term demand,” said Kyle Cooper, managing director of research at IAF Advisors, a Houston consulting firm. Oil has […]

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Natural Gas Revived by Sign of Cold

Natural gas rallied Friday, ending a lengthy selloff as the first sign of a winter chill led to the largest one-day gains in nearly two months. Prices for the front-month December contract settled up 6.4 cents, or 2.8%, at $2.321 a million British thermal units on the New York Mercantile Exchange. The gains blunted steep losses from earlier in the week, but gas still fell 6.9% over the last five sessions. Gas has fallen in six of the past seven weeks. It lost 8% for the month, its largest monthly fall since December. It has lost ground in fourth-straight months, the longest losing streak since September 2011. Natural-gas prices had slumped to three-year lows on worries that moderate weather will limit indoor-heating demand and keep the market oversupplied. Near-record production may put stockpiles at record highs heading into the winter, and an unprecedented glut could develop without cold weather […]

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Oil Companies Curtail Spending on Everything–Except Dividends

A year after the bear market in crude began, oil companies have cut workers, are using fewer rigs and have less money to spend. But they’re still pumping more oil. BP Plc, Royal Dutch Shell Corp. and Hess Corp. are among the companies producing more crude than a year ago. In the U.S., shale explorers have focused on the most productive parts of their land, drilled faster and better wells there and negotiated lower prices from oilfield service companies. It’s helped keep total U.S. output about 1.6 percent higher than at this time last year, even as drilling rigs have fallen by 63 percent. “A well that broke even at $60 18 months ago is now at $40,” said Harold York, a senior analyst for Wood Mackenzie Ltd. in Houston. “If drilling a well generates a return greater than the cost of capital, companies are going to do it. […]

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U.S. Oil Rig Count Declines by 16

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. After a streak of modest growth, the rig count has now declined for nine consecutive weeks. There are now 64% fewer rigs from a peak of 1,609 in October 2014. According to Baker Hughes, the number of gas rigs rose by four to 197. The U.S. offshore rig count was 33 in the latest week, down two from last week and down 20 from a year ago. For all rigs, including natural gas, the week’s total fell by 12 to 775. Earlier in the week, oil prices had their highest gains in two months. But that rally soon fell away, like many recent price spikes, as robust supply and expectations of weaker demand from China reminded investors of the market’s poor […]

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Chevron, Exxon Cut Spending on Oil Price Slide

Oil storage tanks sit at the Esso oil refinery, operated by Exxon Mobil Corp. Both companies managed to make a profit during the third quarter, bolstered by refining operations and chemical divisions that are helped by low oil prices. But the two biggest U.S. energy companies were forced to slash costs to stay ahead of plunging revenues from their oil-and-gas production businesses. Chevron, the second-largest energy company in the U.S. by revenue, said it would lay off between 6,000 and 7,000 employees. The San Ramon, Calif., company is trying to dial back its capital spending by 25% next year to between $25 billion and $28 billion. John Watson , Chevron’s chief executive, told analysts that job reductions would be concentrated in Australia as the company completes construction of two giant, liquefied natural-gas projects. Some cuts also will come from West Africa as Chevron reorganizes operations in Angola. Chevron also […]

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Bad timing: Big Oil ramps up output just as prices sink

Lights from the French oil giant Total refinery of Donges are reflected in the water at night, western France, October 23, 2015. After years of declining output, major oil companies have ramped up crude production this year, just as they are being battered by a plunge in prices due to already excessive supplies. Executives have taken pride in seeing billions worth of investments in new technologies and new fields in places such as Brazil, the North Sea and West Africa kick in and boost output. But most of the investment was made three to five years ago when oil was about $100 a barrel, around double current levels. Now, the new production is contributing to a glut in supply due mostly to the North American shale boom, a faltering global economy and OPEC’s decision not to cut output. Recent third-quarter results show the scale of the problem. According to […]

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Volatility and flash events in the oil market: Kemp

Offshore oil platforms are seen at the Bouri Oil Field off the coast of Libya August 3, 2015. Crude oil prices have been more volatile this year than at any time since the financial crisis of 2008/09 and before that 1991, according to standard measures of price variability. Some of the increase in volatility is more apparent than real, however, as every $1 per barrel move translates into a larger shift in percentage terms now that prices have halved from $100 per barrel to less than $50. The chief of the U.S. Commodity Futures Trading Commission (CFTC) warned a conference last week the oil market had already experienced 35 "flash events" since the start of the year. CFTC Chairman Timothy Massad defined flash events as occasions on which prices moved by at least 200 basis points within an hour but returned to within 75 basis points of the starting […]

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Businesses hit hard due to fuel crisis, shortages

UN climate chief: global emissions pledges not enough yet Governments’ emissions-cutting pledges ahead of a … NOC tankers reach Rasuwa, receive warm welcome from locals The 12 tankers sent by Nepal Oil Corporation to br… Traffic police intensify cross checking in Tanahaun Kathmandu, October 28 The ‘unofficial’ border blockade by India has hit the business sector hard. Many industries across the county are on the verge of closure while there is an acute shortage of essentials and petroleum products in the market. “Vehicles carrying essentials and clothes that have been stuck at the Nepal-India border are yet to make it into the country. Unlike in the past, my business was down during this Dashain ,” said Dipak Subedi, who runs a cloth store in the Capital. Likewise, Shanta Lama of Dolakha, who runs a footpath stall selling grocery items, said that her business is facing a hard time as […]

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S&P Downgrades Saudi Arabia on Oil Worries

Standard & Poor’s Ratings Services on Friday cut its credit rating on Saudi Arabia, saying the tumble in oil prices is driving a wider government deficit. S&P lowered its rating by one notch to A-plus from double-A-minus. The rating is now four notches below the premier triple-A rating. S&P maintained its negative outlook on the kingdom, saying it could lower its rating in the next two years if the government doesn’t reduce the deficit. The ratings firm said it expects Saudi Arabia’s deficit to increase to 16% of gross domestic product this year from 1.5% in 2014, largely due to the sharp decline in oil prices. Saudi Arabia is one of the world’s top crude oil-exporters, leaving it heavily exposed to the swings in oil prices.

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Obama Sends Special Operations Forces to Help Fight ISIS in Syria

WASHINGTON — President Obama announced on Friday that he had ordered several dozen Special Operations troops into Kurdish-controlled territory in northern Syria to assist local fighters battling the Islamic State, authorizing the first open-ended mission by American ground forces into the country. While the deployment was small in scale, it was large in import for a president who until now had refused to send American ground troops for any sustained operations into a country devastated by more than four years of civil war. But with the fight against the Islamic State stalled, Mr. Obama concluded that a change was needed. The White House said the troops would number “fewer than 50” and insisted that they would only train and advise the local forces, not play a direct combat role against the Islamic State, also known as ISIS or ISIL. But administration officials acknowledged that Americans operating closer to the […]

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OPEC October oil output falls led by Saudi, Iraq: Reuters survey

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. OPEC oil output has fallen in October from the previous month, a Reuters survey found on Friday, as declines in top producers Saudi Arabia and Iraq outweighed higher supply from African members. The drops are not indicative of deliberate supply cuts to prop up prices, sources in the survey said, and the Organization of the Petroleum Exporting Countries is still pumping close to a record high as major producers focus on defending market share. OPEC supply has fallen in October to 31.64 million barrels per day (bpd) from a revised 31.76 million in September, according to the survey, based on shipping data and information from sources at oil companies, OPEC and consultants. With one day left in October, the final figures could be revised. Even so, OPEC […]

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OPEC Oil Output Rises in October Led by Libya, Saudi Arabia

OPEC crude production climbed this month, led by gains in Libya and Saudi Arabia. Output by the Organization of Petroleum Exporting Countries rose by 74,000 barrels to 32.211 million a day this month, according to a Bloomberg survey of oil companies, producers and analysts. Last month’s total was revised 89,000 barrels higher to 32.137 million a day because of changes to the Iraqi, Ecuadorean and Emirati estimates. OPEC has been boosting supply as it seeks to force higher-cost producers to cut output. The 12-member group agreed on June 5 to retain its collective output target of 30 million barrels a day, which it has exceeded since June 2014. "This data shows that the battle for market share is far from over," John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone. “There’s a complete lack of coordination and cooperation […]

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South African waters drawing in energy companies

European energy companies among those showing interest in basins in southern African waters. Statoil and Eni add Mozambique acreage to their portfolios. Photo by James Jones Jr./UPI STAVANGER, Norway, Oct. 30 (UPI) — Southern African waters drew more interest from energy explorers with Norway’s Statoil and Italy’s Eni wading into Mozambique waters. Statoil and Eni were among those winning bids to explore for potential reserves in the waters off the coast of Mozambique, where depths range from 650 feet to 5,900 feet. Nick Maden, a regional exploration director for Statoil, said Mozambique waters are among the more promising frontier basins in the area , where the oil potential is said to be "significant." "The position strengthens and develops our global exploration portfolio," he said in statement. Eni last year said it discovered natural gas in a well in an area off the Mozambique coast thought to hold 85 trillion […]

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Iran to announce oil output rise at next OPEC meeting: Shana

Iran will officially notify producer group OPEC in December of its plans to raise its crude oil output by 500,000 barrels per day (bpd), the Iranian oil minister said on Saturday. "We…ask them to respect the 30-million-barrel ceiling which they have agreed," Bijan Zanganeh was quoted as saying by Shana, the ministry’s news agency. "Iran is prepared to supply at least 500,000 bpd of crude oil to global markets," he added. The Organization of the Petroleum Exporting Countries (OPEC) will meet in Vienna in early December. OPEC is pumping close to a record high as major producers focus on defending market share. This has added to amply supplies, which have helped cut prices by more than half from June 2014 to below $50 a barrel. Under a deal reached with six major powers in July, Iran agreed to curb its nuclear program in exchange for an end to economic […]

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PetroChina frets over future growth

PetroChina, one of the largest companies of its kind in China, says it’s concerned by the longevity of the slump in crude oil prices. Photo courtesy of PetroChina BEIJING, Oct. 30 (UPI) — Net profits are expected to decrease significantly if crude oil prices remain low during the fourth quarter, one of China’s largest producers warned. PetroChina, one of the country’s top producers and refiners, reported what may be its worst quarter on record, with net income falling nearly 80 percent year-on-year to around $820 million. The company attributed the decline to weak global economic recovery, slow growth in China and low international crude oil prices. Twin crashes on the Chinese stock market in mid-summer were attributed to lingering weakness . The Chinese government has since intervened by manipulating the value of its currency and slashing interest rates in an effort to slow the decline. Chinese weakness drags on […]

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Fuel-starved Nepal signs agreement with China for oil, ending India’s monopoly

KATHMANDU, Nepal – Fuel-starved Nepal has signed an agreement with China to import gasoline, diesel and cooking gas, effectively ending a monopoly on supply from India, which has restricted fuel convoys as a result of political protests in the Himalayan nation. The decision to import Chinese oil amid severe shortages has brought China a step closer to Nepal, which traditionally is more influenced by India in the south. The two Asian giants have been jostling for influence in landlocked Nepal. Nepal sent a team of officials this week to Beijing, where they signed a memorandum of understanding Wednesday with China National United Oil Corp., said Nepal Oil Corp. official Deepak Baral. Details on how much fuel Nepal will receive, prices and other arrangements still need to be worked out, Baral said, but he confirmed the supply would be on a regular basis. It would be the first time for […]

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Marathon cancels Garyville refinery upgrade

Marathon Petroleum Corp. has canceled a major upgrade of its 522,000-b/d Garyville, La., refinery ( OGJ Online, Apr. 24, 2014 ). The company referred to what would have been a $2.2-2.5-billion project as ROUX, for “residual oil upgrade expansion.” Marathon Petroleum Pres. and Chief Executive Officer Gary R. Heminger cited “market conditions.” The company took a $144 million charge against third-quarter earnings to account for capitalized costs, including front-end engineering and long lead-time equipment. It reported earnings of $948 million for the third quarter, compared with $672 million in the third quarter of 2014.

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Conoco producing more in oversupplied market

ConocoPhillips says production, including in war-torn Libya, is strong despite downturn in crude oil markets. File photo by project1photography/Shutterstock HOUSTON, Oct. 30 (UPI) — Nearly across the board, ConocoPhillips reported net production for the third quarter increased at a time when oversupplies are hurting corporate profits. "We are accelerating actions to position our company for low and volatile prices, while improving the underlying performance of the business," said Ryan Lance, chairman and chief executive officer. Net production from the United States, including struggling Alaska, increased for Conoco. From lucrative Texas and North Dakota shale basins, output increased by 10 percent from third quarter 2014. From Canada, production increased 14 percent and, from the Middle East and Asia, output increased by 10 percent from last year. Only in Europe did production decline, down about 1 percent year-on-year. Most of Conoco’s peers reported heavy losses for the third quarter in a […]

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Industry lobbies for Atlantic drilling

Industry groups launch ad blitz in support of oil and gas exploration in the U.S. waters of the Atlantic Ocean. File photo by A.J. Sisco/UPI RICHMOND, Va., Oct. 30 (UPI) — Industry supporters have started an ad blitz in southern U.S. states, arguing offshore oil and gas exploration can exist side-by-side with the environment. North Carolina Petroleum Council Executive Director David McGowan is among those behind a campaign organized with the help of the American Petroleum Industry. McGowan and others say opening Atlantic basins up to oil and gas drillers would bring net benefits to the region. "With new technologies, offshore energy development is safer than ever and continues to drive coastal U.S. economies while existing with tourism and fishing," McGowan said in a statement. The U.S. Interior Department in February released a draft proposal for 2017-22 for access to federal waters. Ten leases are planned for the Gulf […]

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Exxon boasts of balance during downturn

Exxon says upstream operations offsetting some of its industry declines, though overall third quarter results show energy sector still suffering through market downturn. Photo by Oskari Porkka/Shutterstock IRVING, Texas, Oct. 30 (UPI) — U.S. supermajor Exxon Mobil said declines in its exploration and production operations were offset by gains downstream, where lower prices actually helped. "Quarterly results reflect the continued strength of our downstream and chemical businesses and underscore the benefits of our integrated business model," Chairman and Chief Executive Officer Rex Tillerson said in a statement. Exxon said its upstream, or exploration and production sector, suffered "significantly" during the market downturn as crude oil prices continue to starve companies of revenue. Exxon reported third quarter earnings of $4.2 billion, down nearly 50 percent from last year. Crude oil prices are lower in part because markets are oversupplied at a time when global economic growth is weak. Exxon said […]

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Exxon’s `Leaner Ship’ Floats Higher than Rivals in Downturn

Decades of financial discipline that honed Exxon Mobil Corp. into the leanest, most-efficient oil company in the world are paying off in the worst market slump since the 1980s. As industry job cuts top 200,000 worldwide, Exxon has kept its 75,300-strong workforce intact with none of the sweeping layoffs seen at other oil companies, including its biggest U.S. rival Chevron Corp. “Exxon is just stronger financially than anyone else out there,” Brian Youngberg, an analyst at Edward Jones & Co. in St. Louis, said in an interview. “They were running a leaner ship to begin with.” Exxon posted higher-than-expected third-quarter earnings Friday thanks to soaring profit at its refineries that process oil into fuel. The business has blunted the impact of crude’s collapse. Exxon hasn’t needed to record any of the restructuring charges associated with job eliminations amid the 16-month downturn, and doesn’t expect to do so any time […]

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Chevron Cuts Jobs, Spending, Growth Target as Slump Persists

Chevron Corp. said it’s cutting about 10 percent of its workforce and scaled back its long-term production target amid the worst oil-market slump since the 1980s even as the company posted third-quarter profit that surpassed analysts’ expectations. Chevron said in a statement Friday that it will eliminate 6,000 to 7,000 jobs, the deepest cuts since the 2001 Texaco Inc. merger that created the company in its modern incarnation. Those numbers include a workforce reduction of 1,500 announced earlier this year. Oil and gas output will rise by 13 percent to 15 percent through the end of 2017, rather than the previously forecasted 20 percent production growth, the company said in a slide presentation. The company earned $1.09 a share, 33 cents more than the average of 21 analysts’ estimates compiled by Bloomberg. Profit from refining oil into fuels jumped 59 percent to $2.2 billion. Spending in 2016 will be […]

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That Time a Dog Claimed $46,000 in Damages From the BP Oil Spill

BP has been complaining for a long time that many claims filed after its April 2010 oil spill in the Gulf of Mexico were phony. Now there’s more evidence to back that up. BP has admitted fault in connection with the huge spill and is in the process of paying out tens of billions of dollars in government and individual claims, some civil and some criminal. At the same time, however, the British oil giant says that many of the demands made against its various claim funds have had scant, if any, connection to the catastrophe that killed 11 rig workers and spewed oil off the shore of Louisiana and other gulf states. In the single most egregious case of alleged fraud, BP sued Mikal Watts in December 2013, alleging that the powerful San Antonio plaintiffs’ attorney falsely claimed to represent tens of thousands of "phantom" victims of the […]

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Husky CEO Sees Canada-Only Carbon Tax as `Politically Suicidal’

Husky Energy Inc. Chief Executive Officer Asim Ghosh has a stern warning for Canadian political leaders considering changes to climate policy: don’t go it alone with a carbon tax. The Canadian oil producer controlled by Hong Kong billionaire Li Ka-Shing would support a tax if it’s applied broadly and at least includes the rest of North America, Ghosh said Friday on a conference call to discuss third-quarter earnings results. “It would be politically suicidal for us to do a mea culpa and hang our neck out in a way that disadvantages the industry here,” Ghosh said. “It has to be across the board and Canada as a jurisdiction or Alberta as a jurisdiction cannot be disadvantaged.” Alberta Premier Rachel Notley is planning changes to the government’s climate policy after already raising an existing carbon levy on the oil-producing province’s biggest emitters. Her New Democratic Party took power in May. […]

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U.S. oil demand growth slows to 2.1 percent in August as driving slows down

A drop of diesel is seen at the tip of a nozzle after a fuel station customer fills her car’s tank in Sint Pieters Leeuw December 5, 2014. The resurgence in U.S. oil demand is showing signs of flagging, with drivers easing off the gas pedal a bit in August, according to U.S. data on Friday that may weaken one of the key arguments for bullish oil traders. After several months of near 4 percent growth in fuel use that has helped offset weakness in demand from China, U.S. consumption climbed by just 2.1 percent or 414,000 barrels per day (bpd) in August versus the same month a year ago, U.S. Energy Information Administration data showed. Separate data from the Department of Transportation helps explain why: The number of miles Americans drove in August rose at the slowest pace this year, up 2.3 percent from a year ago. While […]

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Big U.S. shale oil savings fast becoming a thing of the past

Huge cost savings are waning for U.S. shale oil companies, marking an end to the drastic price cuts on equipment and services over the past 16 months that helped them survive the worst industry downturn in six years. Companies including Anadarko Petroleum Corp, ConocoPhillips and Occidental Petroleum Corp have saved millions on drilling and fracking wells in Texas, Colorado and North Dakota since the oil price slide started by demanding that oilfield service companies slash prices by 20 percent to 30 percent or more. Those savings, coupled with big gains in rig productivity that allowed more oil to be pumped with less equipment, created a lifeline for companies coping with a more than 50 percent drop in crude prices. But productivity gains have stalled in the last few months and deflation may be slowing as well, just as producers try to withstand a lower-for-longer price outlook. ConocoPhillips has seen […]

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Exxon third-quarter profit falls 47 percent but beats expectations

A Exxon Mobil gas station is seen in Encinitas, California October 28, 2014. Exxon Mobil Corp ( XOM.N ) said on Friday its third-quarter profit fell 47 percent hit by low crude prices, but results were better than expected, helped by higher profits in the oil company’s refining business. Crude prices have fallen more than 50 percent from last year’s high over $100 a barrel. While the crude decline hurt Exxon’s largest oil and gas business, it also boosted profit margins in refining by lowering feedstock costs. “Quarterly results reflect the continued strength of our downstream and chemical businesses and underscore the benefits of our integrated business model,” Exxon Chief Executive Officer Rex Tillerson said in a statement. The Irving, Texas, company posted profit of $4.24 billion, or $1.01 per share, compared with $8.07 billion, or $1.89 per share in the same quarter a year earlier. Analysts on average […]

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Canadian Oil Sands calls Suncor bid undervalued, exploitive

Canadian Oil Sands says its weathering weak market, recommending shareholders reject unsolicited bid from rival Suncor. Photo courtesy of Canadian Oil Sands CALGARY, Alberta, Oct. 30 (UPI) — While posting a heavy loss for the quarter, Canadian Oil Sands Ltd. said it was advising against what it considers an undervalued bid by rival Suncor. Canadian Oil Sands, among the largest owners in the Syncrude joint venture production group in northern Alberta, said its operating expenses fell to around $5 per barrel, its net debt declined and capital expenses were down 62 percent to $63.5 million. The company said it’s achieved around $750 million in cost reductions during the first nine months of the year. "Canadian Oil Sands is demonstrating its ability to weather this period of low oil prices and even a modest improvement in oil prices will generate robust expansion of cash flow," President and Chief Executive Officer […]

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European Energy Execs See Bleak Market Outlook Persisting

The outlook for oil and natural gas markets remains bleak for the rest of the year and much of 2016, executives from two European energy majors say. SINGAPORE, Oct 30 (Reuters) – The outlook for oil and natural gas markets remains bleak for the rest of the year and much of 2016, meaning there will be no let up in pressure to control costs, executives from two European energy majors said. Oil and liquefied natural gas (LNG) prices have more than halved from peaks in 2014, eroding producer revenues and forcing cost cuts and layoffs. "The industry is under so much pressure that you need to have a clear plan. You need to balance capital expenditure against production," BG Group Chief Executive Helge Lund told Reuters on the sidelines of a conference in Singapore. "Our capex in 2015 will be around 30 percent lower than in 2014. Given the […]

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Ukraine looks to shed dependence on Russian LPG

Ukraine, an important consumer of liquefied petroleum gas (LPG), is tentatively turning to Western suppliers as it aims to wean itself off Russian and Belarusian imports. Political strife between Ukraine and Russia means there is a risk of disruption, or a complete halt, of Russian LPG supplies as has happened with natural gas in the past, traders say. Consumption of propane and butane in Ukraine is growing at a rate of 15 percent a year on average and analysts forecast a 60 percent increase to 1.6 million tonnes by 2020. They expect the share of imported LPG to rise to 80 percent from 60 percent now. LPG is becoming more popular with motorists as it has been 40 to 50 percent cheaper than gasoline throughout 2015, market participants say. Russia and Belarus account for over 90 percent of LPG imports but Ukraine has recently made trial purchases in eastern […]

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Crude oil falls after U.S. growth figures disappoint

A gas station worker fuels a vehicle in Tokyo August 26, 2015. Crude futures dropped in Asian trading on Friday after the release of a report showing that U.S. economic growth had slowed sharply, reinforcing concerns about sluggish demand in a world awash with oil. U.S. economic growth braked sharply in the third quarter as businesses cut back on restocking warehouses to work off an inventory glut, data showed. Both of the main crude benchmarks are on track to post their first weekly gains in three weeks, but with oil still being added to inventories, prices are likely to be rangebound in the coming weeks, traders and analysts said. U.S. crude was down 17 cents at $45.89 a barrel at 0407 GMT, after rising 12 cents in the previous session. The benchmark is on track to post a gain of 2.9 percent this week. Brent crude fell 9 cents […]

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Oil Prices Flip to Small Gain

Oil prices flip-flopped Thursday as fears of lingering oversupply held back a bullish push from technical traders, brokers said. Automated systems and traders who move based on price-chart patterns had sent the market higher Thursday, turning bullish after a surge on Wednesday led to a two-week high settlement, the brokers added. That run got a further push from data provider Genscape Inc., which reported Thursday morning that stockpiles have continued to fall at Cushing, Okla., the delivery point for the benchmark U.S. futures contract, according a person who had reviewed the report. But prices have retreated in the late morning. Many brokers and analysts have warned that there are few reasons to believe the market is coming back into balance. The rally was triggered in part by approval of oil swaps between the U.S. and Mexico and by other signs of drawdowns at Cushing, but those events have limited […]

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Crude oil futures hold gains after Fed sits pat on rates, inventory build

A pump jack operates at a well site leased by Devon Energy Production Company near Guthrie, Oklahoma September 15, 2015. Crude futures held on to strong gains in early Asian trading on Thursday, after the U.S. Federal Reserve kept rates unchanged and a weekly government report on oil stockpiles showed an inventory build that was within expectations. U.S. and global oil benchmarks were little changed, having jumped on Wednesday after the government report on inventory build reversed earlier bearish market expectations. U.S. crude futures CLc1 were down 7 cents at $45.87 a barrel at 0100 GMT. They rose more than 6 percent on Wednesday, snapping three days of losses. Brent crude LCOc1 was down 15 cents at $48.90 a barrel, after rising nearly 5 percent in the previous session. U.S. crude stocks rose last week, while gasoline and distillate inventories fell more than expected, data from the Energy Information […]

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Oil Will Struggle to Break Past $60 a Barrel in 2016

Men work on an oil rig in China. Oil prices will struggle to break past $60 a barrel next year as they extend a year-long slump on continued worries over a global crude glut , major investment banks say. While U.S. shale oil production, a driving factor in that glut, has started to fall, heavyweight producers like Saudi Arabia and Russia are still pumping at near-record levels at a time when the market is anticipating new crude from Iran . As supply remains strong, demand growth is expected to weaken alongside a decline in the economy of China , the world’s No. 2 oil consumer. Next year, Brent crude, the international price gauge, will average $58 a barrel, and West Texas Intermediate, the U.S. oil benchmark, will average $54 a barrel, according to 13 banks polled by The Wall Street Journal. On Wednesday, Brent crude was trading around $48 […]

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Natural Gas Needs Bone-Chilling Winter to Avoid 1990s-Era Prices

The average price for natural gas in the U.S. this year is now the lowest since Bill Clinton was president. And a forecast for a warm winter ahead means there’s no end in sight to the slump. Futures tumbled below $2 per million British thermal units Tuesday amid mild weather and surging output from shale basins. Supplies on the Gulf Coast, the biggest onshore producing region, are already breaking records, and U.S. inventories are poised to reach unprecedented levels before winter temperatures boost demand. That means traders betting on higher prices had better hope for bone-chilling cold in the months ahead. If meteorologists’ predictions of a warmer-than-normal winter are correct, a stockpile glut to the five-year average will persist into next year. A similar scenario in 2012 sent gas prices to decade lows. “If we do end up with a much warmer-than-normal winter, the bullish scenario for prices would […]

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Natural Gas Gains on Smaller-Than-Expected Surplus

Natural gas added to gains Thursday after a smaller-than-expected stockpile addition. The U.S. Energy Information Administration said producers added 63 billion cubic feet of natural gas to storage in the week ended Oct. 23. That is 5 bcf less than the average forecast of 22 analysts and traders surveyed by The Wall Street Journal. Natural gas for December delivery is up 5.3 cents, or 2.3%, at $2.351 a million British thermal units on the New York Mercantile Exchange. December prices are usually higher because of the winter, and the new contract’s bounce ends what had been an 18% fall over six sessions. The smaller-than-expected weekly surplus adds ammunition for bulls who think the oversupplied market could come into a better balance by winter. Natural gas is used as the primary heating fuel in about half of U.S. households, and prices can rise rapidly when extreme weather comes. “You are […]

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Hopes for Golden Age of Gas Evaporate

SINGAPORE—When the International Energy Agency published a report four years ago heralding a “golden age of gas” it seemed little could derail a bright future for the energy source. Now, with prices slumping and demand in key consuming countries like China looking shaky, the energy industry’s optimism about gas seems to have fizzled out. Particular concern hovers around the market for liquefied natural gas–that is, gas which is chilled into liquid form then loaded on ships for transport elsewhere. In recent years, oil and gas majors like Chevron and Royal Dutch Shell have invested billions of dollars into LNG projects in countries like Australia and Qatar, while further vast sums have been spent on plants that turn LNG back into gas in consuming countries, all in the belief the world’s need for the fuel would rise rapidly–especially as countries, particularly in Asia, sought to move away from more polluting […]

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Oil Firms Face Reality of Sustained Low Prices

LONDON—Some of the world’s largest oil companies reported sharply lower earnings on Thursday as they gave up on some ventures that no longer make sense in a world of crude prices around $50 a barrel. Royal Dutch Shell RDS.A -0.87 % PLC posted a $6.1 billion loss in the third quarter after its decision to walk away from exploring the Arctic for oil and exploiting Canada’s oil sands resulted in $7.9 billion in charges. Petro China Co., the biggest oil-and-gas producer by volume in China, said its third-quarter net profit fell by more than 80%. This unpleasant picture is presented after a third quarter in which Brent crude, the international benchmark for oil prices, traded at about $50 a barrel on average, the lowest sustained levels since the financial crisis. The companies said they were straining to change how they do business as prices are depressed by new supplies […]

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Three Things to Watch as Oil Companies Count Costs of the Bust

More than a year into the worst oil bust in a generation, companies keep tallying the carnage. Most of the industry’s third-quarter results will be reported over the next two weeks. Here are three numbers to watch: 1. Writedowns Southwestern Energy Co. set the tone on Oct. 22 with a $2.8 billion charge, twice as much as forecast by Barclays Plc. There’s more to come. Barclays predicted $20 billion in writedowns from six companies in an Oct. 21 report. That’s because some producers use an accounting method that requires them to take charges when estimates of future cash flow fall below the cost to acquire land and drill wells. Of the 61 companies in the Bloomberg Intelligence North American Independent Explorers & Producers index, 25 use that approach, including Devon Energy Corp., Apache Corp. and Chesapeake Energy Corp. 2. Cash Flow During the boom years, shale drillers spent far […]

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Oil industry slipping into the red as outlook dims

The Shell Oil Company’s drilling rig Polar Pioneer is shown in Port Angeles, Washington May 12, 2015. The oil sector is slipping into the red after years of fat profits as the steep slump in oil prices shows little sign of ending, with this quarter shaping up to be the worst since the downturn started. The world’s top oil companies have struggled to cope with the halving of oil prices since June 2014. They have cut spending repeatedly, made thousands of job cuts and scrapped projects. The lower-for-longer outlook for oil prices took its heaviest toll yet in the third quarter as oil companies again reported a dramatic drop in income. Some saw results swing into the loss column, and the industry had billions of dollars in impairment charges. "This downcycle poses significant challenges," Jeff Sheets, ConocoPhillips’ ( COP.N ) chief financial officer, told investors on a conference call […]

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Petronas faces conflict over foreign workers

Then-Iraqi Prime Minister Nouri al-Maliki (center) attends a ceremony to celebrate the start-up of the Garraf oil field in Dhi Qar province on Sept. 21, 2013. (STAFF/Iraq Oil Report) Malaysian oil firm Petronas will file a complaint directly to the oil minister against its Iraqi partners for restricting visas to foreign personnel. A senior South Oil Company (SOC) official involved in the visa process said both SOC and its Dhi Qar province directorate has authorized an effort to replace foreign staff with Iraqis, part of a larger trend to provide more local jobs. "We are currently replacing the engineers, technicians and workers from the Malaysian team in Garraf field… This content is for registered users. Please login to continue. If you are not a registered user, you may purchase a subscription or sign up for a free trial .

Posted On : Published By : Tom Whipple
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Iranian-American Executive Arrested in Iran

Iranian security forces have arrested an Iranian-American businessman who had promoted improved ties between the two countries, adding to signs that hard-liners in Tehran are trying to block foreign investors from entering the Islamic Republic in the wake of the historic nuclear deal. In the past few weeks, Iranian businessmen with links to foreign companies have been detained, interrogated and warned against wading into economic monopolies controlled by the Revolutionary Guard Corps, according to several businessmen interviewed inside and outside of Iran. Siamak Namazi in an undated photo from his Linkedin profile. About two weeks ago, Siamak Namazi, the head of strategic planning at Crescent Petroleum Co., was arrested as he was visiting relatives in Tehran from his home base in Dubai, according to people briefed on the situation. He was arrested, they said, by the Guard’s intelligence arm, which reports to Supreme Leader Ayatollah Ali Khamenei, not the […]

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Petrochemical implications of easing sanctions on Iran

Earlier this month, the US and its negotiating partners announced steps to move ahead on what is known as “adoption day,” intended to show readiness for sanctions relief for Iran. However, relief will only begin on “implementation day,” the day when the International Atomic Energy Agency certifies that Iran lived up to its commitments according to the nuclear deal completed in July. According to the US CIA’s The World Factbook , Iran has the world’s second largest supply of conventional natural gas reserves, much of which is rich in ethane. Given that the rest of the Middle Eastern countries are experiencing limited supplies in ethane, this presents a huge opportunity for the Iranian petrochemical sector as sanctions are eased. Investing in Iran includes enormous political risks, but there are major advantages for international petrochemical investors, including low-cost steam cracker feedstocks and access to the European and Asian markets. The […]

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Africa’s Biggest Economy Defying Currency Critics Chokes Growth

Nigeria’s economy is growing at the slowest pace this decade as oil prices drop. Companies are complaining they can’t get the dollars they need to do business. And trading in the naira has long since dried up. There are many good reasons why Godwin Emefiele, who runs the central bank of Africa’s biggest economy, should lift currency controls and let the naira depreciate. One of the things holding him back is politics. Devaluing the naira may give opposition parties the opportunity to claim that Emefiele’s main supporter, President Muhammadu Buhari, has lost control of the economy. With his backing, the policy chief will be able to resist his critics into 2016 before the worsening economic slump eventually forces him to capitulate, according to Standard Chartered Plc and Bank of America Corp. “They could probably hold out for at least six months, maybe even a year,” said Ayodele Salami, chief […]

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Angola: Why Luanda’s Residents Are Asking – Where Did All the Oil Riches Go?

A few years ago, Luanda, the capital of Angola, was on every ambitious investor’s lips . With large infrastructure and housing projects rapidly changing its appearance, the city seemed to be leaving behind the country’s 27-year civil war. But hopes for renewal are slowly dissipating as the price of the commodity on which Angola’s future was being constructed – oil – steadily declines. Angola is Africa’s second-largest oil producer. It is one of the countries that have been hardest hit by the fall in oil prices. The oil crash forced Angola to slash its 2015 budget by US$17 billion (a 25% reduction ). Construction companies are having difficulties paying their workers, and the Angolan central bank has devalued the currency , the kwanza. Construction threatens to screech to a halt. The fantasy built on oil is crumbling, showing that its benefits were barely felt outside privileged sites of elite […]

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Venezuela is running out of cash

China ends one-child policy Venezuela is running out of money fast and has started selling its gold. The cash-strapped country could default by next year when lots of debt payments are due. Venezuela’s reserves, which are mostly made up of gold, have fallen sharply this year as the country needs cash to pay off debt and tries to maintain its social welfare programs. Venezuela owes about $15.8 billion in debt payments between now and the end of 2016. But it doesn’t have enough to make good on its payments. Venezuela only has $15.2 billion in foreign reserves — the lowest amount since 2003. A lot of those reserves are in gold. Less than $1 billion of Venezuela’s reserves are in cash, and it has a couple billion in reserves at the IMF. Its government won’t say how much gold it currently has. In May, Venezuela had $11.7 billion — […]

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China has created a steel monster and now must tame it: Andy Home

The sun sets behind the SSI UK steelworks in Redcar, Britain September 28, 2015. The British steel industry is in crisis. That statement may come as a surprise to non-UK readers, many of whom might well be forgiven for thinking the country’s steel mills had gone the way of other legacy industries such as coal mining and shipbuilding. But Britain produced 12.1 million tonnes of crude steel last year, making the country the fifth-largest producer in the European Union. It won’t produce that much this year. The last couple of months have brought a string of closure announcements, including that of the Redcar plant in Teeside, a symbol of previous against-the-odds survival. British steel mills are struggling with UK-specific problems, particularly high energy costs that are significantly above the European average. Stung into belated action, the government is scrambling to assemble a rescue plan, albeit with one hand tied […]

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China’s Oil Giants Lose Almost All Profits Amid Crude Crash

The plunge in crude prices all but killed profits at China’s top energy producer and its largest oil refiner. PetroChina Co. on Thursday reported its worst quarterly profit on record, with net income for the three months ended September plunging 81 percent from a year ago to 5.2 billion yuan ($818 million). An increase in refining revenue failed to stanch a 92 percent drop in earnings at China Petroleum & Chemical Corp. Net income at Asia’s biggest refiner, known as Sinopec, was 1.64 billion yuan. Both posted less than half what analysts expected. “Falling oil prices really put those companies under tremendous pressure,” Neil Beveridge, an analyst at Sanford C. Bernstein & Co., said by phone from Hong Kong. “Moving forward, they have to continue to find ways to cut costs and improve efficiency and make themselves more competitive.” Damage from dropping oil prices has been almost inescapable for […]

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ConocoPhillips Reports Biggest Loss Since 2008 on Oil Crash

ConocoPhillips reported its widest quarterly loss in more than six years as a crash in oil and natural gas prices tempered growth from Texas to Canada. The largest major U.S. oil company without refining operations said it further reduced 2015 spending by $800 million for an anticipated total of $10.2 billion. ConocoPhillips lost $1.07 billion, or 87 cents a share in the third quarter, compared with a gain of $2.17 a share a year earlier, the Houston-based company said in a statement Thursday. It was the biggest loss since the fourth quarter of 2008. The loss mirrored those of other major oil companies, including Royal Dutch Shell Plc, which reported a third-quarter net loss of $7.42 billion Thursday, the most in more than a decade. Exxon Mobil Corp. and Chevron Corp. report earnings Friday. Chairman and Chief Executive Officer Ryan Lance has said ConocoPhillips will continue to support its […]

Posted On : Published By : Tom Whipple