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China crude stocks up for fourth straight month

China registered a crude stock build for the fourth straight month in September at 784,000 b/d on an increase in net imports and a decline in refinery throughput, Platts calculations based on recently released official data showed. The crude stock build compared to the 47,000 b/d rise in August. China does not release official data on stocks. Platts calculates China’s net crude stock draw or build by subtracting refinery throughput from the country’s crude oil supply. The latter takes into account net crude oil imports and domestic crude production. Article continues below… Oilgram News brings you fast-breaking global petroleum and gas news on and including: Industry players, upstream and downstream markets, refineries, midstream transportation and financial reports Supply and demand trends, government actions, exploration and technology Daily futures summary Weekly API statistics, and much more The build in September resulted in an average of 755,000 b/d of stock build, […]

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China Probes Graft in Angola Oil Deals

BEIJING—Anticorruption investigators are zeroing in on oil deals in Angola by one of China’s biggest energy companies, part of President Xi Jinping ’s nearly three-year probe into graft in the industry. Investigators are probing whether a former Sinopec Group chairman led the company to overpay for rights to tap offshore oil fields in Angola during his 2007-2011 reign at the company, and whether this suggests possible bribes or kickbacks, according to people familiar with the matter. The former chairman, Su Shulin, was the governor of the wealthy coastal province of Fujian when the Communist Party’s antigraft agency announced his detention on unspecified graft allegations this month. Another businessman active in the Africa-China oil trade, Sam Pa, is also under scrutiny in the same investigation, these people say. Mr. Pa, who has previously been named on a sanctions list by the U.S. government for allegedly facilitating graft in Zimbabwe, was […]

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OPEC Is About to Crush the U.S. Oil Boom

After a year suffering the economic consequences of the oil price slump, OPEC is finally on the cusp of choking off growth in U.S. crude output. The nation’s production is almost back down to the level pumped in November, when the Organization of Petroleum Exporting Countries switched its strategy to focus on battering competitors and reclaiming market share. As the U.S. wilts, demand for OPEC’s crude will grow in 2015, ending two years of retreat, the International Energy Agency estimates. While cratering prices and historic cutbacks in drilling have taken their toll on the U.S., OPEC members have also paid a heavy price. A year of plunging government revenues, growing budget deficits and slumping currencies has left several members grappling with severe economic problems . The fact that the U.S. oil boom kept going for about six months after the group’s November decision also means OPEC has so far […]

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U.S. oil output slide looms as shale firms hit productivity wall

An oil pump jack can be seen in Cisco, Texas, August 23, 2015. Stagnating rig productivity shows U.S. shale oil producers are running out of tricks to pump more with less in the face of crashing prices and points to a slide in output that should help rebalance global markets. Over the 16 months of the crude price rout, production from new wells drilled by each rig has risen about 30 percent as companies refined their techniques, idled slower rigs and shifted crews and high-speed rigs to "sweet spots" with the most oil. Such "high-grading" helped shale oil firms push U.S. output to the loftiest levels in decades even as oil tumbled by half to less than $50 a barrel and firms slashed rig fleets by 60 percent. But recent government and private data show output per rig is now flatlining as the industry reaches the limits of what […]

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Obama Keystone Veto Seen Helping Trudeau Reset U.S. Alliance

Canada’s new prime minister seen focusing on trade, climate A prompt rejection of TransCanada Corp.’s Keystone XL pipeline would make the job easier for Canada’s incoming Prime Minister Justin Trudeau as he seeks to reset the country’s relationship with the U.S., which he says was damaged by outgoing leader Stephen Harper. Trudeau, whose Liberal Party Monday night defeated Harper’s Conservatives with a surprise majority in Parliament, could use a quick U.S. denial of Keystone to focus discussions with U.S. President Barack Obama on issues such as trade and climate. There’s been speculation among Keystone watchers including Republican North Dakota Senator John Hoeven, a supporter of the $8-billion project, that Obama would reject the pipeline shortly after the Canadian election. “If it’s going to be rejected, which I think most people think it is, the sooner the better so it can be attributed to Harper,” said James Coleman, assistant professor […]

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U.S. gas prices drifting lower

Refineries are returning to full service in the United States, meaning gas prices are moving closer to $2 per gallon, analysis finds. Photo by Oskari Porkka/Shutterstock WASHINGTON, Oct. 20 (UPI) — More refineries working at full capacity and plenty of supply on the domestic market means U.S. drivers are paying far less for gas, market analysts said. AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.25 per gallon, the lowest it’s been since early February. The price at the pump is about 5 cents, or 2.7 percent, less than this time last week and Tuesday’s price represents the 11th straight day for declines. AAA said in its weekly market snapshot heavy fall maintenance at U.S. refineries — which is now subsiding — kept gas prices higher than they would’ve been, but ample domestic supply put a ceiling on how high they would […]

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More natural gas to leave U.S. market

Canadian energy company Emera gets U.S. approval to export gas to countries without a U.S. free-trade agreement. Photo by Reinhard Tiburzy/Shutterstock WASHINGTON, Oct. 20 (UPI) — The U.S. Energy Department said it approved the export of compressed natural gas from a port in Florida to countries without a U.S. free-trade agreement. Canadian-based energy company Emera submitted a request to the U.S. government in late 2013 to export the gas equivalent of 9.13 billion cubic feet per day to countries that don’t have a free-trade agreement with the United States. "Among other factors, the department considered the economic, energy security, and environmental impacts and determined that exports at a rate of up to 0.008 billion cubic feet per day for a period of 20 years was not inconsistent with the public interest," the Energy Department said in a statement. Emera under the terms of the consent agreement will export compressed […]

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Oil well out of control in North Dakota

Oil is still leaking as Oasis Petroleum works to get well under control after reporting incident to the North Dakota Health Department during the weekend. Photo by David Gaylor/Shutterstock BISMARCK, N.D., Oct. 20 (UPI) — An oil well in western North Dakota is out of control at least three days after a spill was reported, the state Department of Health reported. The Health Department said it was notified of the spill by Oasis Petroleum, which said it lost control of the well Saturday night local time. Bill Suess, a spill manager for the department, was quoted by the Grand Forks Herald as saying about 1,760 barrels of oil were recovered so far from the well site. "It’s a significant leak," he said. There was no statement on the spill from Oasis Petroleum. The Health Department said light sheen was observed on the White Earth River a little less than […]

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Canada’s Trudeau gets nod for green agenda

Canadian Liberal leader and Prime Minister designate Justin Trudeau gets strong support from oil-rich Alberta province while environmental group questions his commitment to a low-carbon economy. Photo by Heinz Ruckemann/UPI EDMONTON, Alberta, Oct. 20 (UPI) — The premier in the oil-rich Canadian province of Alberta said she was looking forward to working with the next prime minister on environmental protection. In a last-minute surge, the Liberal Party in Canada emerged victorious, pushing the Conservative Party led by Prime Minister Stephen Harper into the opposition. Alberta Premier Rachel Notley welcomed the outcome of the Canadian federal election and the upcoming tenure of Prime Minister designate Justin Trudeau. "By growing our economy and protecting the environment, we can continue to make Alberta and Canada a great place to live, work and raise a family," Notley said in an emailed statement. Alberta announced plans in June to double a tax on carbon […]

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OPEC has stalled the shale revolution

( John Kemp is a Reuters market analyst. The views expressed are his own) Oct 20 (Reuters) – The resilience of U.S. shale producers has surpassed all expectations as they have wrung extra efficiencies out of their operations and pulled rigs back to the most prolific sections of existing plays. The shale sector’s ability to cut costs and sustain their output in the face of plunging prices has been extraordinary and testament to the entrepreneurial spirit and technical skill of the independent producers. Shale producers are justifiably proud of their ability to survive the perfect storm that has hit their industry since the middle of 2014. But it should not disguise the fact that the collapse in oil prices has paused the shale revolution, with the sector’s focus shifting from growth to survival. The revolution cannot be reversed. Techniques once mastered will not be unlearned. And adversity has forced […]

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Daniel Yergin: Where’s all the stimulus from the 50% drop in oil prices?

The fall in oil prices heralds a momentous shift in world energy markets from the BRIC era of emerging markets (Brazil, Russia, India and China) to the Shale Era. An oil tanker sits anchored off the Fos-Lavera oil hub near Marseille, France, Oct. 15. © Reuters Yet there are two continuing puzzles about the price collapse. First, the 50% fall in prices has not been the global economic stimulus that might have been expected. So far, at least, it has not been a Fourth Arrow for the world economy. Is this telling us something about deeper troubles ahead for the world economy? The second puzzle concerns geopolitics. The oil market is usually very sensitive to geopolitics. Geopolitical risk is high now: The Middle East is in crisis. The West’s relations with Russia are the worst they have been since the end of the Cold War; the stand-off in Syria […]

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Will Tidal and Wave Energy Ever Live Up to Their Potential?

As solar and wind power grow, another renewable energy source with vast potential — the power of tides and waves — continues to lag far behind. But progress is now being made as governments and the private sector step up efforts to bring marine energy into the mainstream. In the Pentland Firth, a strait that separates the Orkney Islands from Northern Scotland, strong tidal currents have challenged sailors for centuries. But some of that marine energy is now being captured through a project known as MeyGen. This summer, the Atlantis group began construction on a submerged tidal turbine array consisting of four, three-bladed, seabed-mounted turbines, enough to deliver 6 megawatts to the grid by 2016 and power approximately 3,000 Scottish homes. By the early 2020s, Atlantis is planning to build 269 turbines in the firth, capable of generating 398 megawatts of electricity, enough to power roughly 200,000 homes. On […]

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« The Problem With Oil Prices Is That They Are Not Low Enough

The problem with oil prices is that they are not low enough. Current oil prices are simply not low enough to stop over-production. Unless external investment capital is curtailed and producers learn to live within cash flow, a production surplus and low oil prices will persist for years. Energy Is The Economy GDP (gross domestic product) correlates empirically with oil prices (Figure 1). GDP increases when oil prices are low or falling; GDP is flat when oil prices are high or rising (GDP and oil price in the figure are in August 2015 dollars). CPI-Adjusted US GDP + Trendline & WTI October 2015_150 Figure 1. U.S. GDP and WTI oil price. GDP and WTI are in August 2015 dollars. Note: I use WTI prices because Brent pricing did not exist before the 1970s. Source: U.S. Bureau of Labor Statistics, The World Bank, EIA and Labyrinth Consulting Services, Inc. (click […]

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The Smart Money Is Still Betting Against Crude Oil

Crude oil prices have remained relatively calm since their 25 percent late-August spike thanks to U.S. dollar weakness and reduced expectations of Fed rate hikes. As a result, many investors are wondering if the bottom is in for crude oil and energy stocks and whether it’s a good time to look for bargains. Ever since warning about the oil bust in June 2014 , I have also been trying to determine where the bottom is for crude oil. Despite investors’ hopes, the fundamentals of the crude oil market have not changed much since the start of the year. From a technical standpoint, WTI crude oil is sitting under a major resistance zone from $50 to $52 per barrel that needs to be broken to give another bullish signal. If WTI crude is unable to break above that resistance zone and weakens again, $40 is the next major support level […]

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Operating in a World of $50 Oil

While hopes for a reversal in oil prices may have faded just after mid-August when U.S. crude oil futures slipped to a six-and-a half year low , the battered petroleum industry continues to plod along in its search for ways to steer through these difficult times. Last month, some industry players met in Singapore for the 14th Annual Marine Money Singapore Ship Finance Forum, where there was a discussion on dealing with the impact of oil at $50 a barrel. Rigzone takes a look at the key issues under scrutiny at the forum, including the future direction of oil prices, the impact on the offshore support vessels market and oil consumption in China – the primary driver for global demand growth in recent years. To recap, global oil prices have lost around half of its value from a year ago due mainly to a supply glut, a development exacerbated […]

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Oil prices slip below $50 on Chinese demand concerns

A worker fills petrol on a vehicle at the petrol pump in in Kathmandu, Nepal September 28, 2015. Oil prices fell on Monday on concerns about the pace of economic growth in China, the world’s largest energy consumer, and signs that global oversupply is curbing Saudi crude exports. China’s economy grew at the slowest pace in six years in the third quarter, according to official data released on Monday, making it more and more likely Beijing will cut interest rates to spur activity. Data also showed that Chinese oil demand fell slightly in September, meaning the country’s year-to-date growth is running behind the International Energy Agency’s forecast. Brent for December delivery LCOc1 was down $1.06 at $49.40 a barrel at 0809 ET. U.S. crude for November delivery CLc1 fell 83 cents to $46.43 a barrel, extending last week’s steep loss. "Chinese GDP data and the rise in the Saudi […]

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Hedge funds trim oil shorts as market starts to rebalance: Kemp

Hedge funds have unwound most of the record short position they established in U.S. crude futures and options between June and August amid signs that the oil market is rebalancing. Hedge funds and other money managers had cut their gross short position in the main NYMEX WTI futures and options contract to 90 million barrels by Oct 13 ( reut.rs/1LxSDoK ). Reported shorts had been reduced from 108 million barrels the previous week and a peak of 163 million barrels in early August, according to the U.S. Commodity Futures Trading Commission. Fifty-seven hedge funds were still running reported short positions last Tuesday, down modestly from a peak of 66 in August. But the average short position of those who remain has been almost halved to 1.58 million barrels, down from 2.86 million ( tmsnrt.rs/1LxTwO7 ). Hedge funds have become much less aggressive in shorting U.S. crude as the previous […]

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For Hedge Funds, a Can’t-Miss Trade Goes Bust

The trade that was supposed to carry the year is ruining it instead. Hedge-fund and private-equity managers over the past year began piling into debt issued by troubled energy companies, hoping to profit off a reversal of oil’s slide. They raised billions of dollars for the effort, in many cases telling backers it was a once-in-a-generation chance to pounce. But crude has continued to fall, slamming the companies and many large investors who thought they had bought in near the bottom. An energy fund at Magnetar Capital LLC is down 12% this year through the end of September after the more-than $14 billion hedge-fund firm invested billions of dollars in distressed oil and gas companies, according to investor documents reviewed by The Wall Street Journal. Brigade Capital Management LP’s main hedge fund is having its worst stretch since 2008 in part because of the $16 billion firm’s exposure to […]

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Gasoline Prices Drop to Six-Year Low

Gasoline futures tumbled to a six-year low Monday, extending a selloff spurred by growing supplies and concerns about weakening demand. The slump in gasoline futures, which are down 10% this month, is a sign of a burgeoning glut of refined fuel, mirroring the excess supplies of crude that sent oil prices plunging late in 2014. Falling gasoline prices offer a continued benefit for U.S. households, which are expected to save hundreds of dollars each on fuel this year. While crude-oil prices continued to fall through much of 2015, gasoline prices rose as drivers opted to travel more miles and buy larger cars and trucks that require more fuel . At the end of August, gasoline futures were up 14% for the year, compared with a 7.6% decline in crude. Gasoline has since capitulated to the weakness in crude oil, down 13% year-to-date through Monday compared with crude’s 14% fall […]

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OPEC, non-OPEC experts to talk, but unlikely to cooperate on cuts

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is pictured at its headquarters in Vienna, Austria, August 21, 2015. A meeting of OPEC and non-OPEC oil market experts this week is unlikely to increase the prospect of joint co-operation on supply curbs or show much support for Venezuela’s proposed price band, OPEC delegates and analysts said. The Organization of the Petroleum Exporting Countries has invited eight non-member countries including Russia for talks on the market at its Vienna headquarters on Wednesday. OPEC’s own meeting to set policy is not until Dec. 4. Non-OPEC producers have refused to work with OPEC in cutting supply to reduce a surplus that has prompted prices to sink to below $50 a barrel from $115 in June 2014. In turn, OPEC has refused to limit supply alone and many members have raised output. Cash-strapped member Venezuela is nonetheless pushing for OPEC […]

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Syrian rebels say receive more weapons for Aleppo battle

Free Syrian Army fighters of the 101 Division stand behind sandbags near the town of Morek in the northern countryside of Hama, Syria October 14, 2015. Rebels battling the Syrian army and its allies south of Aleppo say they have received new supplies of U.S.-made anti-tank missiles from states that oppose President Bashar al-Assad since a major government offensive began there on Friday. Rebels from three Free Syrian Army-affiliated groups contacted by Reuters said new supplies had arrived since the start of the attack by the army backed by Iranian fighters and Lebanon’s Hezbollah. But officials from one of the groups said that while new quantities had arrived, the supplies were not enough for the scale of the assault. They declined to be identified due to the sensitivities of the matter. "A few will not do the trick. They need dozens," said one of the officials. A number of […]

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Putin Officials Said to Admit Real Syria Goal Is Far Broader

File photo showing Russian MIG-29 jet fighters. Russian intervention may last as long as a year, official says As Russia’s air war in Syria nears its fourth week, officials now admit that Moscow’s aim is far broader than the publicly announced fight against terrorist groups. The Kremlin’s real goal is to help Syrian President Bashar al-Assad retake as much as possible of the territory his forces have lost to opponents, including U.S.-backed rebels, Russian officials told Bloomberg News. Moscow’s deployment of several dozen planes, as well as ships in the Black and Caspian Seas, could last a year or more, one official said. President Vladimir Putin is willing to run the risk of falling into the kind of quagmire that helped sink the Soviet Union a generation ago for the chance to roll back U.S. influence and demonstrate he can dictate terms to Washington. If the strategy is successful, […]

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Iran backs battle for Syria’s Aleppo with proxies, ground troops

A Free Syrian Army fighter rides on a motorbike with his children past the rubble of damaged buildings Oct. 18 in the old city of Aleppo. (Hosam Katan/Reuters) BEIRUT — A senior Iranian commander is coordinating an assault on the Syrian city Aleppo by a mix of Shiite forces from Iran, Lebanon and Iraq in support of Syrian troops, militiamen say, an indication of deepening Iranian involvement in Syria’s war that has transcended national boundaries. Maj. Gen. Qasem Soleimani , commander of Iran’s elite Quds Force and the public face of Iran’s military intervention in the region, has ordered thousands of Shiite militiamen into Syria for an operation to recapture Aleppo, according to officials from three Iraqi militias. The militiamen are to join Iranian troops and forces from Hezbollah, the Iranian-backed Lebanese Shiite militia, the officials said. The Iraqi Shiite militia Kitaeb Hezbollah has sent around 1,000 fighters from […]

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Iranian official says expects sanctions to be lifted this year

VIENNA, Oct. 19 (Xinhua) — An Iranian official said Monday he expects sanctions to be lifted by the end of the year on the condition Iran fully implements its nuclear-related commitments made in a landmark nuclear deal adopted on Sunday. Iranian nuclear negotiator Abbas Araqchi Monday acknowledged after meeting here with his counterparts from P5+1, namely the United States, Britain, France, Russia and China plus Germany, that the large task of dismantling centrifuges, a key point of the deal, had not yet begun. He told reporters the green-light to begin the process would first be required from the Iranian Atomic Energy Organization, something he expected would happen soon. Senior officials from Iran and P5+1 on Monday discussed issues such as redesign and modernization of the Arak heavy water reactor, possible military dimensions of Iran’s nuclear past, as well as preparations for lifting nuclear-related economic and financial sanctions against Iran, […]

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European Oil Companies Steal a March on U.S. Peers in Iran

TEHRAN—European oil companies are in fierce competition for the best oil and gas fields in Iran when Western sanctions are lifted, while U.S. energy firms watch from the sidelines. The contest has been evident this week at the first major oil-and-gas conference in Iran since world powers agreed in July to lift sanctions in exchange for curbs on the Persian Gulf nation’s nuclear program. The European Union and the U.S. on Sunday formally adopted the nuclear agreement. Iran is looking for Western help to ramp up its oil-and-gas industry after sanctions shaved more than one million barrels off its average daily production. At the conference in Iran, European executives pitched their company’s prowess. Total SA TOT -2.14 % of France cited its long history of working with Iran before it left the country in 2010 because of sanctions. Italy’s Eni E -2.25 % SpA played an animated video showing […]

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OPEC Brings Oil Price War Home in Pursuit of Asia’s Cash

When it comes to deciding how much to charge Asian oil buyers, OPEC members are showing little regard for tradition. Suppliers from the Organization of Petroleum Exporting Countries have long moved in lockstep, raising or lowering prices in tandem. Now, Kuwait is undercutting Saudi Arabia by the most on record and Iraq is also selling its oil more cheaply than the group’s biggest member. Qatar is pricing cargoes at the biggest discount in 27 months to competing crude from the U.A.E.’s Abu Dhabi. While the group that accounts for about 40 percent of global oil supplies maintains a collective strategy of flooding the market with crude, the semblance of unity has vanished when setting monthly selling prices. With Asia forecast to account for most of the growth in global oil demand this year, competition for the region’s buyers is trumping historical allegiances. “It’s a full-on fight for market share […]

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China returns to play larger role in Angolan November crude program

China has returned to be the main buyer for Angola’s November crude program, data from Platts shows, contrasting with the previous trading cycle, when more barrels headed to European refineries and the US. "Asia took more and Europe and the US took less in November," an Angolan crude trader said. "It’s a role reversal from the previous month." Angolan crude is heavily dependent on China, with 40%-60% of Angolan crude exports typically going there every month. Unipec, the trading arm of Chinese state-owned Sinopec, is by far the largest buyer of Angolan crude, often buying 35%-40% of the monthly export program. Article continues below… Oilgram News brings you fast-breaking global petroleum and gas news on and including: Industry players, upstream and downstream markets, refineries, midstream transportation and financial reports Supply and demand trends, government actions, exploration and technology Daily futures summary Weekly API statistics, and much more However, during […]

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Saudi crude oil exports fall in August to 6.998 million bpd: JODI

Saudi Arabia’s crude oil exports fell by 278,000 barrels per day in August, despite historically high wellhead production, while volumes of shipped refined oil products rose to a record high, official data showed on Sunday. The OPEC heavyweight shipped 6.998 million bpd in August, down from 7.276 million bpd in July, figures published by the Joint Organisations Data Initiative (JODI) showed. The world’s biggest crude exporter trimmed its production by around 100,000 bpd in August pumping 10.265 million bpd, but still maintained high output levels in line with a strategy of defending market share. Monthly export figures are provided by Riyadh and other members of the Organization of the Petroleum Exporting Countries (OPEC) to JODI, which published them on its website. Saudi Arabia burns higher crude volumes to generate power for air conditioning during the hot summer months. It has also been feeding more crude to domestic refineries as […]

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Saudi Arabia’s Tasnee Drops Most in Two Months After Net Losses

National Industrialization Co. dropped the most in almost two months after the Saudi Arabian holding company known as Tasnee posted a third-straight quarterly loss. The stock retreated 8.2 percent to 13.18 riyals at the close as about 9.1 million shares traded, more than five times the three-month daily average. Tasnee on Monday posted a 296.3 million-riyal ($79 million) loss for the third quarter, compared with a profit of 243.7 million riyals a year earlier. The average of four analyst estimates compiled by Bloomberg was for a 62.5 million-riyal profit. “The reported loss is attributable to lower average sales prices and lower sales volumes," Tasnee said in a statement to the Saudi bourse. Brent crude, a benchmark for half the world’s oil, has tumbled more than 40 percent in the last 12 months, placing pressure on the economy in Saudi Arabia, OPEC’s biggest oil producer. Tasnee joins a list of […]

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Chinese firm invests in Mexican wind power projects

China’s Envision Energy announced the acquisition of a majority stake in ViveEnergia, a Mexican wind power renewable energy developer. File Photo by Pat Benic/UPI MEXICO CITY, Oct. 19 (UPI) — China’s Envision Energy announced the acquisition of a majority stake in the wind energy projects of Mexico’s ViveEnergia. Low-speed wind and turbine manufacturer Envision Energy, based in Shanghai, sees itself as a competitor to the Spanish company Gamesa, which dominates Mexico’s wind energy market with a 73 percent share. Envision Energy’s deal brings it a majority stake in a portfolio of projects not yet started but designed to have a capacity of 600 MW, as well as a strategic partnership with ViveEnergia to develop 1.5 GW of wind energy capacity by 2020. The acquisition includes a plan to bring the planned projects to a ready-to-build stage by the end of 2015, the companies reported. Terms of the agreement were […]

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Venezuela Foreign Reserves Fall to 12-Year Low as Payments Loom

Venezuela’s international reserves fell to a 12-year low of $15.3 billion as the South American country faces payments on its dollar debt totaling $4.5 billion in October and November. Reserves fell $614 million on Oct. 16, the central bank said Monday on its website. That’s the lowest level since May 2003 and the biggest daily decline since June 3, according to data compiled by Bloomberg. The country, which has seen dollar revenue decline with oil prices, and its state-owned oil company, Petroleos de Venezuela SA, have principal and interest payments of $1.5 billion due this month and another $3 billion in November, according to data compiled by Bloomberg. The government will likely be able to pay its debt due this year, although there’s a 60 percent chance of default next year, Eurasia Group said Monday. “While Eurasia Group continues to expect Venezuela to service its debt in 2015, a […]

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China 2016 coal imports could fall a further 25 million tonnes

A man stands amidst coal at a factory in Shaoxing, Zhejiang province, April 29, 2014. Coal shipments to top importer China could fall a further 25 million tonnes in 2016, analysts said on Monday, with foreign suppliers struggling to compete in a massively oversupplied market. Shipments of coal to China over the first nine months to September fell 29.8 percent to 156.36 million tonnes. Volumes are on track to fall about 60 million tonnes in 2015. The recent government push to support its domestic market and focus on cleaner energy sources has raised doubts over whether its status as an importer is sustainable. "We assume a further 25 million tonne drop from China," said Fabio Gabrieli, director of dry bulk analysis at Mercuria Energy Trading, speaking at the Coaltrans world coal conference. "We believe that next year what China drops is going to impact Indonesian exports," Gabrieli said, adding […]

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Discordant Financial Messages From China Spur Global Unease

Photo Workers direct a crane lifting newly made steel bars at a factory of Dongbei Special Steel Group in Liaoning province, China Credit China Daily/Reuters HONG KONG — China’s bungled stock market bailout was a significant setback to its decades-long efforts to build a modern financial system. Its currency devaluation shocked global investors and altered the policy calculus at central banks from Hanoi to Washington. A highly anticipated package of overhauls to sprawling state-owned companies was a crushing rebuke to hopes that China would move to privatize such businesses. Instead of reducing their stakes, the Communist Party said it would increase its control over such companies. To many global policy makers and investors, China’s spate of surprises is driven by the government’s need to get the economy back on track. Growth is slipping. The latest data on Monday showed that the economy grew at 6.9 percent in the third […]

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China’s Better-Than-Expected GDP Prompts Skepticism From Economists

BEIJING—Within minutes of China’s publishing its rosier-than-expected numbers, a wave of skepticism emanated from economists over the accuracy of the official 6.9% third-quarter growth figure . Economists’ doubts centered in part on the apparent disconnect between the headline figure and the underlying data. Both exports and imports declined during the third quarter, and industrial production was weaker than expected. Factories have seen 43 consecutive months of falling prices and—despite a flood of government infrastructure spending —fixed-asset investment decelerated in September. While retail sales and services have held up, and new lending data in September point to a pickup in demand, these factors haven’t been enough to offset the parade of negative data, economists said. “When you look at the numbers, it’s not entirely easy to see how GDP growth held up so well,” said Société Générale SCGLY -1.35 % CIB economist Klaus Baader. The weak reports leading up to […]

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Battery Makers See a Big Break Coming — No, Seriously This Time

Energy storage developers have been saying for a decade that the industry’s on the verge of a big breakthrough that will finally turn the battery into a major player in the power market. At least this time around, they’ve got customers backing them up. Utilities Southern California Edison and San Diego Gas & Electric said at a storage conference last week that supply from batteries now competes against natural-gas fired plants that start up when demand peaks. Storage developers are inking deals with big corporations including InterContinental Hotels Group Plc and Whole Foods Markets Inc., which want to install storage units to save on power bills. Batteries account for a tiny fraction of global power resources. The technology has been prohibitively expensive and, until recently, relatively unproven. The U.S. government’s Argonne National Laboratory, the same one that built the first nuclear reactor to generate power, just offered its help […]

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Canadian Oil Sands Says It Has Had No Other Offers Than Suncor’s

Canadian Oil Sands Ltd. says it hasn’t been approached with any other takeover offers after rejecting Suncor Energy Inc.’s C$4.3 billion ($3.3 billion) hostile bid, though it’s exploring alternatives. Chief Executive Officer Ryan Kubik said there are plenty of parties who might be interested in taking over, partnering or merging with his Calgary-based firm. To date though, Suncor’s offer is the only one on the table, he said. “Nobody’s approached us so far,” Kubik said in an interview at Bloomberg’s office in Toronto on Monday. “There are many parties that would like to own it.” Canadian Oil Sands urged shareholders to reject Suncor’s takeover attempt, accusing the larger rival of undervaluing its business and exploiting undisclosed information about a partnership in making a low-ball offer. Suncor, Canada’s largest crude producer, renewed efforts this month to take over its partner and biggest shareholder in the Syncrude oil-sands joint venture after […]

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Halliburton Cuts More Jobs as Fracking Hit Worst in Downturn

Halliburton Co. cut another 2,000 jobs in the past month as the worst oil market slump in decades saps demand for work at the world’s largest provider of fracking services. The Houston-based company said the first quarter of next year may represent the lowest point for its North American profit margin as customers start fresh with new spending budgets for 2016 and tap Halliburton’s pressure-pumping expertise to start new wells. The comments came after the company reported a third-quarter loss of $54 million. "The pumping business in North American is clearly the most stressed segment of the market today, but it’s also the market we know the best," President Jeff Miller told analysts and investors Monday on a conference call. "This is the segment that we expect to rebound the most sharply." Oil has swung between a bear and a bull market in North America this year as the […]

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Number of North Dakota oil drilling rigs hold steady

The North Dakota oil rig count held steady at 68 this week, the state’s Department of Mineral Resources reported Monday. Photo by David Gaylor/Shutterstock BISMARCK, N.D., Oct. 19 (UPI) — North Dakota reported Monday that 68 oil rigs are involved in exploration and production in the state, the same figure as last week. Despite the recent stability, the number is down from 190 active drilling rigs on the same date in 2014, when crude oil prices were about 42 percent higher. The count serves as an indicator of the health of the energy sector in North Dakota, the No. 2 oil producing state. North Dakota oil production peaked in December 2014 and has fallen every month since , the state’s Department of Mineral Resources reported last week. World oil prices fell to a six-year low in August, the International Energy Agency reported. The price of North Dakota oil, which […]

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Canadian Oil Sands Rejects Suncor Offer

Suncor’s unsolicited bid for the largest owner in the Syncrude oil-sands consortium has been closely watched by industry observers as a sign that Canada’s biggest oil and gas producer may think global crude prices are at or close to their bottom, after falling 50% over the past year. Oil’s slump has punished stock prices of most energy producers, including Canadian Oil Sands, whose shares fell to 15-year lows in the weeks before Suncor made its offer. “It’s no secret that Suncor’s timing is opportunistic. It’s designed to take advantage of Canadian Oil Sands’ shareholders during an unprecedented period of market uncertainty in the energy industry,” Don Lowry, chairman of Canadian Oil Sands, said on a conference call. Mr. Lowry accused Suncor of seeking to buy out Canadian Oil Sands at “fire-sale prices,” but he left the door open to a possible deal by saying the board would continue to […]

Posted On : Published By : Tom Whipple
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Oasis Well In North Dakota Out Of Control, Leaking Oil And Brine

WILLISTON, N.D., Oct 19 (Reuters) – A North Dakota oil well owned by Oasis Petroleum Inc blew out over the weekend and is leaking an unknown amount of crude and saltwater, state officials said on Monday. The well is located about 15 miles south of White Earth, North Dakota, in Mountrail County, one of the more-prolific oil-producing regions in the state. The blowout happened at 11 p.m. local time, Saturday, Oct. 17, and the company worked all weekend to regain control of the well but so far has been unsuccessful, the North Dakota Department of Health said in a statement. A light sheen of oil was spotted about 850 feet (259.08 m)away from the well on the White Earth River, a tributary of the Missouri River, and an absorbent boom has been installed in an attempt to keep the oil from moving downstream, state officials said. Crude oil extracted […]

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As Conservation Cuts Electricity Use, Utilities Turn to Fees

Electric utilities across the country are trying to change the way they charge customers, shifting more of their fixed costs to monthly fees, raising the hackles of consumer watchdogs and conservation advocates. Traditionally, charges for generating, transporting and maintaining the grid have been wrapped together into a monthly cost based on the amount of electricity consumers use each month. Some utilities also charge a basic service fee of $5 or so a month to cover the costs of reading meters and sending out bills. Now, many utility companies are seeking to increase their monthly fees by double-digit percentages, raising them to $25 or more a month regardless of the amount of power consumers use. The utilities argue that the fees should cover a bigger proportion of the fixed costs of the electric grid, including maintenance and repairs. “The [electricity] grid is becoming a more complex machine, and there needs […]

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In Canada, Stunning Rout by Justin Trudeau and the Liberal Party

Photo Justin Trudeau of the Liberal Party and his wife before giving his victory speech in Montreal, Canada. Credit Jim Young/Reuters OTTAWA — The nine-year reign of Prime Minister Stephen Harper and his Conservative Party came to a sudden and stunning end on Monday night at the hands of Justin Trudeau , the young leader of the Liberal Party . Starting with a sweep of the Atlantic provinces, the Liberals capitalized on what many Canadians saw as Mr. Harper’s heavy-handed style, and the party went on to capture 184 of the 338 seats in the next House of Commons. The unexpected rout occurred 47 years after Mr. Trudeau’s father, Pierre Elliott Trudeau, first swept to power. Justin Trudeau, who will be 44 on Christmas Day, will become Canada’s second-youngest prime minister and the first to follow a parent into office. While the Liberal Party had emerged on top in […]

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Ruble Slumps With Crude Oil as Credit Suisse Sees New-Year Rally

The ruble weakened the most worldwide, sinking in lockstep with falling crude prices. Credit Suisse Group AG predicted the currency of the world’s biggest energy exporter will rally in the new year, triggering a resumption of dollar-buying by the central bank. The ruble fell for the first time in four days as oil tumbled on data that showed the Chinese economy grew at the slowest pace since 2009 in the third quarter. Russian policy makers will cut interest rates 50 basis points by the end of the month as the ruble stabilizes and may need to intervene to tame its gains in the first quarter, Credit Suisse economists said in a note today. "Neither the commodities markets nor the currencies markets have fully absorbed the Chinese data, so there’s a chance the ruble will test the level of 62.50 to 63 in the next few days," Evgeny Koshelev, an […]

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Oil prices slip as investors wait for China GDP data

A gas station worker fuels a vehicle in Tokyo August 26, 2015. Oil prices slipped on Monday, wiping out some of the previous session’s gains, as investors waited for China’s third quarter gross domestic product figures. Brent for December delivery LCOc1 was down 8 cents at $50.38 a barrel as of 0142 GMT after settling up 73 cents on Friday. U.S. crude for November delivery CLc1 was down 5 cents at $47.21 after finishing the previous session 7 cents up. "Data from China should underpin a move to crude," said Jonathan Barratt, chief investment officer at Sydney’s Ayers Alliance. China’s GDP figures, due later on Monday, are expected to show growth in the world’s second largest economy slowed to below 7 percent for the first time since the global financial crisis. "If the figure is bearish then it means more stimulus," Barratt said. A bullish figure meant the world’s […]

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Oil companies “virtually abandoning” exploration

The hunt for new stores of oil and gas has been dramatically curtailed amid a global crude slump, with exploration budgets at the largest oil companies expected to tumble 50 percent next year from their peak levels in 2013, according to a new analysis. Investment banking firm Tudor, Pickering, Holt & Co., which tracked exploration capital spending at integrated oil companies and major exploration and production companies, forecast that spending on exploration will fall to about $25 billion next year. Oil companies are spending less in part because service costs have tumbled alongside oil prices, allowing explorers to spend less money to search for new reservoirs. But a vast majority of those spending cuts are related to a pullback in activity, according to the Tudor, Pickering, Holt & Co. analysis released to investors Monday. “Many (exploration and production) companies are virtually abandoning exploration altogether, especially in the U.S.,” the […]

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Syrian Regime, Backed by Russia, Iran and Hezbollah, Expands Ground Offensive to Aleppo

Syrian pro-regime forces backed by Russian airstrikes have expanded their ground offensive to the strategic city of Aleppo, one of the clearest signs yet of how Russia’s recent military intervention has emboldened President Bashar al-Assad and his loyalists. In the bitterly fought multi-sided war, Aleppo is among the most coveted prizes. Losing partial control of the city, which was once Syria’s largest and its commercial capital, was an embarrassment to the regime. But with the backing of Russian warplanes, Iranian forces and the Lebanese militia Hezbollah, Mr. Assad’s forces could now be in position to regain large parts of the city and the surrounding countryside. “I suspect Assad always wanted to take back Aleppo because it is such an important city and retaking it has such strategic and symbolic importance,” said Emile Hokayem, a Middle East analyst at the International Institute for Strategic Studies, a London-based military and security […]

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Saudi Arabia’s fiscal break-even oil price to be around $US 100

The latest IMF Article IV consultation report on Saudi Arabia was published on 9 September 2015. http://www.imf.org/external/country/sau/ Extract: Government spending has increased substantially in recent years. Consequently, the breakeven oil price rose to $106 a barrel in 2014 from $69 a barrel in 2010. As a result, with the large decline in oil prices, the fiscal deficit has increased sharply and is likely to remain high over the medium-term. These deficits will rapidly erode the fiscal buffers (in the form of government deposits and low public debt) that have been built over the past decade. http://www.imf.org/external/pubs/ft/scr/2015/cr15251.pdf Let’s put this into some graphs. We start with the fiscal deficit first, then look at the external balance. Expenditure Fig1: Expenditure, Budgetary Central Government Operations During the period of high oil prices until 2014, expenditure grew by 9-15% pa. In early 2015, King Salman disbursed a bonus of 50 bn Riyal to […]

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Saudi’s China Oil Play Has No One Over a Barrel: David Fickling

Saudi Arabia has traditionally had a lock on Asian oil markets. In Japan, Korea and Taiwan, the kingdom’s barrels make up about one third of crude oil imports . In China, that position is now under threat from Russia. Russia has shrugged off Western sanctions over Ukraine and enjoyed a plunge in production costs thanks to the ruble’s slide against the greenback. It briefly surpassed Saudi as China’s leading crude supplier in May and will strengthen its position over the next decade as it builds a second pipeline to the country, according to BMI Research : Saudi Arabia isn’t about to take the challenge lying down. State-owned Saudi Aramco is looking at multi-billion-dollar deals to buy marketing, refining and retail assets from China’s CNPC, Bloomberg News reported earlier this month. It’s already receiving record quantities of crude at its leased storage tanks on Japan’s Okinawa archipelago. Sabic, the world’s […]

Posted On : Published By : Tom Whipple