Category:

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 […]

Posted On : Published By : Tom Whipple
Category:

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 […]

Posted On : Published By : Tom Whipple
Category:

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 […]

Posted On : Published By : Tom Whipple
Category:

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 […]

Posted On : Published By : Tom Whipple
Category:

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 […]

Posted On : Published By : Tom Whipple
Category:

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 […]

Posted On : Published By : Tom Whipple
Category:

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 […]

Posted On : Published By : Tom Whipple
Category:

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 […]

Posted On : Published By : Tom Whipple
Category:

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 […]

Posted On : Published By : Tom Whipple
Category:

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 […]

Posted On : Published By : Tom Whipple