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Oil Bears Buck Market Sentiment

Oil prices might have rebounded from multiyear lows but some market bears think the cost of a barrel could still almost halve from current levels by next summer. U.S. oil prices fell to around $38 per barrel in late August, the lowest level since the depths of the financial crisis, on worries about an economic slowdown in China. Prices have since recovered, to close to $50 a barrel as many investors have grown more confident that a fall in supply will alleviate the global glut of crude. But Pierre Andurand, one of Europe’s top energy traders, said the price of a barrel of West Texas Intermediate crude could fall as low as $25 in the next 10 months as the global demand outlook is revised down. Mr. Andurand, founder of London-based hedge fund Andurand Capital Management LLP, which gained around 38% last year, said he expects WTI—trading around $46.18 […]

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Oil Prices Fall From Growing Inventories

Oil prices closed slightly lower Thursday after data confirmed a large addition to U.S. crude stockpiles last week, another sign that a global oversupply of crude isn’t going away. Light, sweet crude for November delivery settled down 26 cents, or 0.6%, to $46.38 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 44 cents, or 0.9%, to $48.71 a barrel on ICE Futures Europe. The U.S. Energy Information Administration showed crude stocks grew by 7.6 million barrels last week, a bearish sign for the market. The latest EIA data add to recent reports from International Energy Agency and the Organization of the Petroleum Exporting Countries that supply is holding at near-record levels and that demand is showing only tepid increases. “This kind of illustrates there’s still a lot of oil out there,” said Peter Donovan, broker for Liquidity Energy in New York. “There’s no argument.” […]

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Is Natural Gas Fueling the Syrian Conflict?

In the Golan Heights, there is an unassuming aqueduct used for local irrigation. Not so long ago, however, this mundane structure was part of a much grander project, known as ‘Tapline,’ a 754 mile long Trans-Arabian pipeline to transport oil straight from the Persian Gulf to the Mediterranean Sea. When Tapline was constructed in 1947, the idea of creating a shortcut for transporting oil over land made economic sense. This was still true twenty years later, when, despite fierce animosity, Israel and the Arab states cooperated to keep the pipeline running after Israel captured part of the Golan in the 1967 war. But, with the arrival of oil supertankers, it became more economically attractive to load the oil in the Gulf and sail it straight to Western markets, instead of using Tapline. While the Tapline project may have been buried, the idea of building a pipeline through the Middle […]

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Iran Meets Atomic Agency Deadline for Material on Past Activities

Iran has honored a Thursday deadline for supplying information to the International Atomic Energy Agency for assessing its past nuclear work, including activities that might have been military-related, the agency reported. Meeting the deadline was another in a series of steps that Iran promised to take as part of the nuclear agreement reached in July with six world powers, including the United States. The agreement will relax sanctions on Iran in exchange for limits on the Iranian nuclear program to ensure it is peaceful. In a statement , the atomic agency, the nuclear-monitoring arm of the United Nations , said that as of Thursday, its requests for materials clarifying “past and present outstanding issues regarding Iran’s nuclear program were completed.” Under the timeline for all preparatory steps required to put the nuclear agreement into effect, the atomic agency’s director general, Yukiya Amano, now has until Dec. 15 to provide […]

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Kurdistan Oil Payment Raises Hopes for Western Energy Companies

The $12 million payment to Gulf Keystone comes amid greater optimism about the semiautonomous Kurdish government’s ability to pay oil companies , which say they are owed over $1 billion for crude exports from the region. Kurdistan has failed to pay the companies as it wages an expensive fight with Islamic State and is struggling to pay its own government workers. Adding to the woes, oil prices are down by more than half in the past 15 months and Kurdistan is arguing with Baghdad over oil sales. But the increase of oil exports in recent months and the KRG’s independent sales from the Ceyhan oil terminal in Turkey have raised enough revenue for the government to cover its domestic budget as well as pay the oil companies, said Tony Hayward , the chairman of Genel Energy GENL 5.39 % PLC, the largest international oil producer in the region, and […]

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Saudi Arabia’s Kayan Drops Most Since 2014 After Surprise Loss

Saudi Kayan Petrochemical Co. declined the most since December after announcing a loss in the third quarter as production, sales and prices all fell. The chemicals company part-owned by Saudi Basic Industries Corp. retreated 9.5 percent to 9.20 riyals at the close in Riyadh, leading a slide in the Tadawul All Share Index. About 21 million shares were traded, more than two-and-a-half times the three-month daily average, according to data compiled by Bloomberg. Kayan reported a 13.81 million-riyal ($3.6 million) loss for the third quarter, compared with a 66.91 million-riyal profit a year earlier. The mean of three analyst estimates compiled by Bloomberg was for a profit of 45 million riyals. The loss was due to a decrease in production, sales and average selling prices, Kayan said in a statement to the Saudi bourse on Thursday. Brent crude, a benchmark for half the world’s oil, has tumbled more than […]

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Angolan Government Cuts Spending by 50% as Oil Revenue Plunges

An oil tanker waiting in a queue of traffic outside the Port of Luanda in Luanda, Angola. The government of Angola, sub-Saharan Africa’s second-largest crude producer, cut spending by half this year following a plunge in oil prices, Vice President Manuel Vicente said. Public investment was reduced by 53 percent, Vicente told lawmakers in a state-of-the-nation address on Thursday in the capital, Luanda. He delivered the speech in the absence of President Jose Eduardo dos Santos, 73, who was “indisposed,” according to parliamentary Speaker Fernando da Piedade Dias dos Santos. Oil accounts for about two-thirds of fiscal revenue in Angola, putting the nation at risk after crude prices more than halved since June last year. The central bank devalued the currency twice this year and raised the benchmark interest rate four times in response, while the government has sought funding from the World Bank and China to help cushion […]

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Saudi Arabia targets Russia in battle for European oil market

From global majors such as Shell and Total to more modest Polish energy firms, oil refiners in Europe are cutting their longstanding use of Russian crude in favor of Saudi grades as the world’s top exporters fight for market share. Russia has for years been muscling in on Asian markets where Saudi Arabia was once the unchallenged dominant supplier. But now Riyadh is retaliating in Moscow’s backyard of Europe with aggressive price discounting. This has nothing to do with Western sanctions imposed on Russia over Ukraine, which apply to energy industry equipment but not to oil or gas itself. Instead it is a commercial battle for customers as both exporters ramp up their output despite weak world oil prices. This is likely to complicate further a dialogue between Moscow and the OPEC exporters’ group on tackling the global oil glut, with joint production cuts already looking elusive. Trading sources […]

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Mexico And Brazil Oil Auction Failures Are Further Proof Of Peak Oil At Current Prices

Summary Mexico’s first attempt to open up its oil industry to foreign companies was a failure. Its auction only attracted $2.6 billion in potential investments, compared to $17 billion maximum potential. Brazil had a similar failure more recently, with only 10% of its blocks being auctioned receiving viable bids. These latest failed auctions, coupled with other facts point to a permanent peak in oil production at current prices, which is unfolding presently, which will only reverse once prices rise. By far the most spectacular and talked about trend since the oil price collapsed more than a year ago, is the dramatic decline in drilling that occurred in the United States since the beginning of this year. For many months, we have been hearing about the resiliency of the shale industry, fueled by the delay in reaction of the industry in response to declining prices. At first, there was a […]

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Ghana: Nigeria Threatens to Cut Gas Supply to Ghana Over Ghc100 Million Debt

The power crisis in the country is set to worsen in the coming days as Nigeria threatens to cut gas supply to the Aboadze Thermal plant. The development has been occasioned by the failure of government to settle its indebtedness to the Nigerian gas authorities. According to sources within the Power sector, Ghana owes the Nigerian authorities over GHC100million. Currently, Ghana receives in excess of 140million standard cubic feet per day of gas from Nigeria. The supply, although not enough, has greatly enhanced power supply in the country over the last few weeks. Speaking on recent developments in the power sector, a former Chief executive officer of the Volta River Authority Dr. Charles Wireku-Brobbey told Accra-based Joy FM that constant power supply in the country is not dependent on the incoming power barges from Turkey. "The problem for us not the arrival or non-arrival of the power barges. As […]

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Exiled opposition leader returns to Venezuela, is arrested

AP Photo/Gregorio Marrero CARACAS, Venezuela (AP) — A Venezuelan opposition leader who had been living in self-imposed exile was arrested Thursday after returning to the socialist South American country. Former Gov. Manuel Rosales flew into Venezuela on Thursday after six years as a fugitive. Intelligence police met him at the airport and took him into custody. He was expected to appear in a Caracas court later in the day. Before his arrest, Rosales vowed to continue fighting the country’s 16-year-old socialist administration and urged Venezuelans to vote in Dec. 6 legislative elections. Authorities had warned him days earlier that he would be detained if he came back. Rosales was governor of the western state of Zulia, where he returned Thursday. He ran for president in 2006 and lost to Hugo Chavez. He went into exile in 2009, fleeing to Peru and then Panama after prosecutors accused him of stealing […]

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Iran backs Indonesia as OPEC member

Iran supports Indonesian bid to rejoin OPEC after six-year absence. Photo courtesy of SHANA/Hasan Hosseini. TEHRAN, Oct. 15 (UPI) — The Iranian government welcomes the eventual return of Indonesia to the Organization of Petroleum Exporting Countries, Iran’s oil minister said. Indonesia in September submitted a request to reactivate its membership in OPEC. "We hope that with Iran’s support in the upcoming OPEC meeting, Indonesia’s return to the organization can be finalized," Iranian Oil Minister Bijan Zangeneh said. "Then, Tehran and Jakarta can resume their bilateral cooperation in the global oil market." Iran’s oil minister welcomed his Indonesian counterpart, Sudriman Said, to the capital to discuss how the two re-emerging producers can work together . Zangeneh said Iran is interested in working with Indonesia in the crude oil and liquefied natural gas markets. According to the U.S. Energy Information Administration, natural gas production in Indonesia increased by more than 20 […]

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OPEC accepts Indonesia’s request to reactivate membership

The Organization of Petroleum Exporting Countries has accepted Indonesia’s request to reactivate the country’s membership. Indonesia formally asked for reinstatement at the cartel’s June ministerial meeting in Vienna (OGJ Online, June 5, 2015) . The Southeast Asian country withdrew from OPEC in 2009 citing growing internal demand for energy, declining crude oil and condensate production in mature fields, and limited investment to increase production capacity. Indonesia had become a net importer of petroleum and other liquids by 2004 after domestic demand exceeded production. Indonesian government officials said that rejoining OPEC will strengthen its cooperation with oil-producing countries, provide greater access to crude oil supplies, and allow the country to be a link between energy producers and consumers. Indonesia currently buys crude oil and petroleum products through third parties or traders and seeks direct access to long-term crude supply contracts through negotiations between OPEC-member national oil companies. Indonesia produced about […]

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China third-quarter GDP: 5 things to watch

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

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Fracking Wells Associated With Premature Birth

Expectant mothers who live near active natural gas wells operated by the fracking industry in Pennsylvania are at an increased risk of giving birth prematurely and for having high-risk pregnancies, new Johns Hopkins Bloomberg School of Public Health research suggests. The findings, published online last week in the journal Epidemiology, shed light on some of the possible adverse health outcomes associated with the fracking industry, which has been booming in the decade since the first wells were drilled. Health officials have been concerned about the effect of this type of drilling on air and water quality, as well as the stress of living near a well where just developing the site of the well can require 1,000 truck trips on once-quiet roads. “The growth in the fracking industry has gotten way out ahead of our ability to assess what the environmental and, just as importantly, public health impacts are,” […]

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Schlumberger says oil outlook is ‘increasingly challenging’

Sign up for quick access to a wealth of global business news, including: Schlumberger says oil outlook is ‘increasingly challenging’ Newspaper + Premium online Newspaper + Premium online Premium Full FT.com subscription Premium Full FT.com subscription Standard Full news & archive Standard Full news & archive Trial Try Premium online Trial Try Premium online Price Monthly Annual $66.30 $11.77 per week $53.00 $9.25 per week $36.00 $6.45 per week $1.00 for 4 weeks $1.00 for 4 weeks FT Alphaville plus selected FT blogs yes yes yes yes Unlimited FT.com article access yes yes yes yes Unlimited mobile and tablet access yes yes yes yes Unlimited fast FT yes yes yes yes 5 year company financials archive yes yes yes yes The LEX column yes yes no yes ePaper access yes yes no yes Three exclusive weekly emails yes yes no yes Daily newspaper delivery yes no no For 4 […]

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In the Heart of the Texas Oil Patch, It’s Gas That’s Taking Off

Photographer: Eddie Seal/Bloomberg The oiliest county in Texas has seen its new natural gas production capacity more than double as drillers home in on their most profitable acreage. The peak output rate from new gas wells in Karnes County has surged 134 percent since January, estimates from Drillinginfo show. The only other county in Texas’s Eagle Ford shale patch where new gas capacity’s gaining is Live Oak, about 50 miles southwest of Karnes, the Austin-based energy data provider said. Gas producers are focusing on the most prolific parts of their plays as they grapple with the worst price collapse since 2008, and Karnes County has long been a sweet spot in Texas’s Eagle Ford shale. The 20,000-square-mile shale formation supplies about one-sixth of the nation’s crude. Karnes County, southeast of San Antonio, is home to “top-tier acreage," Chris Smith, senior research analyst at Drillinginfo , said in a telephone […]

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Occidental’s North Dakota deal mixed omen for pending oilfield deals

Occidental Petroleum Corp’s move to sell its North Dakota acreage likely removes a logjam that had impeded U.S. oilfield deals for much of the year, though the deal’s price sets an unusually low bar for future deals and gives buyers the advantage over sellers. Oxy is selling all of its roughly 300,000 acres in North Dakota’s Bakken shale formation to a private equity fund in a deal valued around $500 million, sources familiar with the matter told Reuters. The price is roughly one-sixth, though, of what Wall Street had expected Oxy to fetch for the assets as recently as last year. Houston-based Oxy did not sell the North Dakota assets out of distress; indeed, it has $2.8 billion in cash in the bank. Rather, the deal removes an operational distraction from managers focused elsewhere and helps the company achieve its goal of being cash-flow neutral. Still, for ConocoPhillips, Whiting […]

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America’s Biggest Shale Gas Field Chokes on Its Own Supply

(Bloomberg) — For the first time since America’s shale boom began, the flow of natural gas from the nation’s biggest reservoir is close to dropping below year-ago levels. Output from the Marcellus basin in Pennsylvania and West Virginia is faltering as pipeline capacity fails to keep up with the surge in production. While space on Appalachian pipelines has more than doubled this year, it hasn’t been enough to keep the flow moving freely, according to Bloomberg New Energy Finance. That has some producers “choking back” the output from wells in the play, said Charles Blanchard, an analyst at BNEF in New York. “They’re saying it’s not even worth it day to day to keep my wells online because I’m losing money on every molecule that I sell.” Marcellus production has surged more than 14-fold in the past eight years. Now drillers are waiting on seven new Appalachian pipeline projects […]

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Investors lurch backwards on US rate rise expectations

Sign up for quick access to a wealth of global business news, including: Investors lurch backwards on US rate rise expectations Newspaper + Premium online Newspaper + Premium online Premium Full FT.com subscription Premium Full FT.com subscription Standard Full news & archive Standard Full news & archive Trial Try Premium online Trial Try Premium online Price Monthly Annual $66.30 $11.77 per week $53.00 $9.25 per week $36.00 $6.45 per week $1.00 for 4 weeks $1.00 for 4 weeks FT Alphaville plus selected FT blogs yes yes yes yes Unlimited FT.com article access yes yes yes yes Unlimited mobile and tablet access yes yes yes yes Unlimited fast FT yes yes yes yes 5 year company financials archive yes yes yes yes The LEX column yes yes no yes ePaper access yes yes no yes Three exclusive weekly emails yes yes no yes Daily newspaper delivery yes no no For […]

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U.S. Consumer Prices Fall, Clouding Fed Rate Decision

The Federal Reserve’s policy dilemma deepened Thursday with new data showing a persistently sluggish pace of inflation, held down largely by lower gas prices. U.S. consumer prices fell in September, driven by the drop in gasoline prices. The consumer-price index, which measures what Americans pay for everyday goods and services, fell a seasonally adjusted 0.2% in September, the second straight month of overall price declines, the Labor Department said. The monthly pace of inflation has been steadily falling since May, when renewed weakness in gas prices took hold. Prices were unchanged over the past year, but gasoline prices have fallen 29.6% during that time, the department said. Besides cheaper gas, consumer prices have been held down by the strong dollar, which makes imports cheaper for Americans. Excluding the volatile food and energy categories, prices rose a relatively firm 0.2% in the month and a moderately healthy 1.9% over the […]

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Natural Gas Sinks on Unexpectedly Large Storage Addition

Natural gas suffered its biggest losses and had its most volatile trading in more than two weeks after a larger-than-expected stockpile addition dashed a weather-related rally. The U.S. Energy Information Administration said producers added 100 billion cubic feet of natural gas to storage in the week ended Oct. 9. That is 6 bcf more than the average forecast of 18 analysts and traders surveyed by The Wall Street Journal. Prices for the front-month November contract settled down 6.5 cents, or 2.6%, at $2.453 a million British thermal units on the New York Mercantile Exchange. It was the largest losses in one day since Oct. 1 and puts gas back to within 1% of the three-year low it closed at to start the month. The losses came from a high starting point as the market had been up more than 2% in trading before the EIA’s storage update. It is […]

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How Banks Funded the U.S. Oil Boom and (So Far) Escaped the Bust

When Whiting Petroleum needed cash earlier this year as oil prices plummeted, JPMorgan Chase, its lead lender, found investors willing to step in. The bank helped Whiting sell $3.1 billion in stocks and bonds in March. Whiting used almost all the money to repay the $2.9 billion it owed JPMorgan and its 25 other lenders. The proceeds also covered the $45 million in fees Whiting paid to get the deal done, regulatory filings show. Analysts expect Whiting, one of the largest producers in North Dakota’s Bakken shale basin, to spend almost $1 billion more than it earns from oil and gas this year. The company has sold $300 million in assets, reduced the number of rigs drilling for oil to eight from a high of 24, and announced plans to cut spending by $1 billion next year. Eric Hagen, a Whiting spokesman, says the company has “demonstrated that it […]

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Canadian Oil Sands Takeover `Ill Advised,’ Venator’s Osten Says

Suncor Energy Inc.’s offer to buy Canadian Oil Sands Ltd., the largest stakeholder in oil-sands miner Syncrude Canada Ltd., is “ill advised” because of the low oil price and the potential for further share-price declines, said Venator Capital Management Chief Executive Officer Brandon Osten. For the the Canadian Oil Sands purchase “to offer reasonable rates of return, you kind of need $70 dollar-plus oil and you’re not really there,’’ Osten said in an interview Wednesday at Bloomberg’s Toronto office. Venator Capital is a Toronto-based hedge fund with about C$300 million ($233 million) under management, and has shorted Suncor since the first quarter, he said. Suncor, Canada’s largest crude producer, is taking advantage of a prolonged oil rout to renew its effort to take over Canadian Oil Sands after two friendly offers were turned down earlier this year. Suncor has offered to trade 0.25 Suncor share for each share of […]

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Schlumberger Now Sees ‘Challenging’ Global Oil Market Continuing

Three months ago, the head of Schlumberger Ltd. thought the industry had seen the worst of the U.S. oil market collapse. Now he’s not so sure. Chief Executive Officer Paal Kibsgaard said in July that a recovery might begin by the end of the year. Now he says it could be delayed. Kibsgaard’s comments came in a statement Thursday as Schlumberger reported a 49 percent drop in third-quarter profit. The market is "increasingly challenging with activity expected to be reduced further, " Kibsgaard said. The world’s largest oilfield services provider reported that profit fell to $989 million, or 78 cents a share, from $1.95 billion in the year-ago quarter. The earnings beat by 1 cent the average of 37 analysts’ estimates compiled by Bloomberg. Even if demand catches up to supply, business will probably continue to decline, Kibsgaard said, as a “lack of available cash flow exhausts capital spending […]

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Oxy to exit North Dakota’s oil fields in sale to private equity fund

The Occidental Petroleum Corp headquarters is pictured in Los Angeles, California September 16, 2013. Occidental Petroleum Corp, the fourth-largest U.S. oil producer, has agreed to sell all of its North Dakota shale oil acreage and assets to private equity fund Lime Rock Resources in a deal worth around $500 million, according to sources familiar with the matter. The sale, which marks the first exit of this downturn by a major oil company from the Bakken shale formation, encompasses all of Oxy’s more than 300,000 acres in the state, including a 21,000 square-foot regional office built just three years ago. Lime Rock, which already operates in North Dakota, is buying the assets as the oil industry contends with the worst crude price crash in more than six years, a drop the fund used to its advantage. As recently as last fall, Wall Street had expected Oxy’s Bakken assets to sell […]

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Exclusive: Canada railroads cut crude freight rates to lure shipments

The Canadian Pacific railyard is pictured in Port Coquitlam, British Columbia February 15, 2015. Canadian rail companies are slashing rates for shipping crude in their first serious effort to revive an industry rocked by the rout in global oil prices, according to shippers and terminal operators who are seeing discounts of as much as 25 percent. The move highlights how railroads are struggling to compete with pipelines for a share of shrinking crude shipments across North America, particularly in Canada, where a long hoped-for boom in oil sands traffic has fizzled with the oil bust. Canadian National Railway and Canadian Pacific Railway, which together account for the vast majority of crude-by-rail cargoes shipped across the country, are dropping prices, four people familiar with the cuts told Reuters. The size of the cuts varied among sources, leading one source to suggest that railroads may be working with individual shippers to […]

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Development of giant Norwegian oil field evolving

Statoil awards more contracts to help build the giant offshore Johan Sverdrup oil field. Photo courtesy of Harald Pettersen/Statoil STAVANGER, Norway, Oct. 15 (UPI) — Statoil announced more contracts were rolling out for the Johan Sverdrup oil field offshore Norway ahead of the 2019 start of production. Statoil, working on behalf of the consortium managing the Johan Sverdrup oil field, awarded Norwegian contractor Aibel with a $74 million contract to lay electricity cables from the shore for field development. "Aibel has already been awarded the contract for construction of the deck for the drilling platform on Johan Sverdrup," the Norwegian company said in a statement. "This contract is the last of the three major contracts covering the land-based power supply project." Statoil and its partners at Johan Sverdrup, Maersk Oil and Lundin Petroleum, in early 2014 outlined the development plan for the field using multiple phases. The company said […]

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Oil Prices in Choppy Trade on Fears of Growing U.S. Stockpiles

Crude-oil prices in Asia trade Thursday seesawed in a tight range as concerns about expanding U.S. inventories amid declining consumer spending there are keeping traders subdued. On the New York Mercantile Exchange, light, sweet crude futures for delivery in November traded at $46.55 a barrel at 0307 GMT, down $0.09 in the Globex electronic session. November Brent crude on London’s ICE Futures exchange rose $0.15 to $49.30 a barrel. Both grades briefly touched above the $50-a-barrel mark last week after a string of oil executives and leaders from the Organization of the Petroleum Exporting Countries hinted a price recovery was on the horizon. But strong output data and expectations of Iranian oil returning to the export market, coupled with tepid demand from China, rattled market confidence. U.S. retail sales registered a 0.1% month-over-month rise in September, signaling the U.S. economy could be losing steam as consumers curb discretionary spending. […]

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Oil glut up by half a billion barrels in 2015

An oil pumping machine is seen as non-usable gases are being burnt behind it in Sakir, south of Manama, October 11, 2014. The world’s big oil exporters pumped more than half a billion barrels more crude than needed in the first nine months of this year, industry data gathered by Reuters and major energy market forecasters show. The Organization of the Petroleum Exporting Countries pumped an average of 31.20 million barrels of oil per day (bpd) between January and September, Reuters estimates show, more than 2 million bpd higher than demand for their oil. That is a total of more than 550 million barrels of crude, all of which needs to be stored somewhere. Core OPEC countries, led by Saudi Arabia, decided almost a year ago to concentrate on building market share rather than defending oil prices, and the result has been a huge oversupply that has pushed the […]

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Kurdish Oil Producers Rally as Gulf Keystone Receives Payment

Oil producers operating in the Kurdish area of Iraq rallied Thursday after Gulf Keystone Petroleum Ltd. received its second payment from the regional government for crude exports. The Kurdistan Regional Government paid Gulf Keystone $15 million for exports of crude from the Shaikan field this month, the company said in a statement Thursday. Its shares advanced as much as 13 percent, while fellow producers in the region DNO ASA and Genel Energy Plc gained as much as 9.8 percent and 8.6 percent, respectively. “This October 2015 payment follows a similar payment in September,” Gulf Keystone said. It’s in line with pledges from the KRG to resume regularl compensation to international oil companies for exports from the region, it said. Oil producers in the semi-autonomous region are receiving the first scheduled compensation this year after getting caught in a dispute over revenue sharing between authorities in the northern Kurdish enclave […]

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Cuban Oil: Black Gold or Black Hole?

Cuba has oil and gas. That is certain, say geologists. The big question is just how much. Chris Schenk, Geologist at the U.S. Geological Survey, was one of the first to assess the island’s natural resources. By Schenk’s estimate Cuba has at least 4.6 billion barrels of undiscovered oil and 9.8 trillion cubic feet of undiscovered natural gas. Both are considered significant enough to pique the interest of any major energy company in the world. “People are always interested in where the oil is,” Schenk told FOXBusiness.com. The challenge is finding and tapping those resources, which are said to be primarily in the North Cuba Basin on the northwestern part of the island. Source: USGS U.S. President Barack Obama and Cuban President Raul Castro sat down at the United Nations in late September as part of the ongoing efforts to thaw relations that began earlier this year. Even before […]

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Waits Stretch for Days as Nepal Confronts Fuel Shortage

Photo Lining up for fuel at a gas station in Kathmandu, Nepal, this week. Credit Hemanta Shrestha/European Pressphoto Agency KATHMANDU, Nepal — In recent days, during peak tourist season in Nepal , visitors here have been confronted with a strange sight: miles of double- and triple-parked cars, buses, trucks and motorcycles along the ancient city’s avenues. The lines snarl through narrow streets and block main intersections on the ring road. Drivers stretch out in their back seats, snoring. Others join impromptu card games on car hoods or pass the hours with their cellphones. Food vendors cook and sell water on the pavement. The destination for all these vehicles? Gas stations. On Tuesday, after a two-week ban — imposed amid a fuel shortage stemming from unrest over Nepal’s new Constitution and a dispute with neighboring India — the government briefly allowed them to provide fuel to private vehicles. In a […]

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China Continues to Eat More and More Meat—and That Matters for Everyone

As the world’s most populous country, China consumes a lot of food. As an emerging economic powerhouse, even despite recent financial woes, China consumes a lot of food in greater quantities than it did three or four decade ago—meat, in particular. And with a growing population and a growing middle class, the demand for meat in China is expected to continue to rise . As a new report from PricewaterhouseCoopers posits, it “will place enormous burdens on an already challenged domestic food system and have significant ramification on international trade in agriculture.” The report, released Monday, is mainly concerned with the economic effects of China’s changing diet, but the rise of meat consumption—and increasing dependence on imported animal feed required to meet that demand—are tied up in global land use, resources, and climate change too. While estimates vary, the U.N. Food and Agriculture Organization attributes 14.5 percent of global […]

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Wall Street Sets Aside More Cash to Cover Weakening Oil Loans

Wall Street lenders that bankrolled the debt-fueled U.S. oil boom are putting aside more cash to cover potential energy losses as "lower for longer" takes its toll. After rebounding to $61 a barrel in June, crude prices tumbled 24 percent in the third quarter. JPMorgan Chase & Co. said Tuesday that it increased its loan loss reserves for oil and gas by $160 million in the third quarter. Bank of America Corp.’s at-risk loans increased 15 percent from a year ago due to the deteriorating finances of some of its oil and gas borrowers. And Wells Fargo & Co. reported that it reserved additional cash to cover potential losses in the energy sector. The financial industry has so far avoided the kind of damage that triggered the collapse of hundreds of energy lenders in the 1980s. Banks are in the middle of the second round of twice-yearly reassessments of […]

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Putin: Economic crisis has peaked

Russian President Vladimir Putin says the economy in his country is growing accustomed to low crude oil prices and sanctions pressures. Pool Photo by Chip Somodevilla/UPI MOSCOW, Oct. 14 (UPI) — Economic decline has reached its peak and Russia is adapting to the new climate of low crude oil prices and sanctions pressures, President Putin said. "We have generally reached the peak of the crisis and overall our economy is gradually adapting to these new economic circumstances" Russian President Vladimir Putin said at an investment conference in Moscow . "Not all of it, but generally, it has adapted." The Russian economy teetered on the brink of recession when entering fiscal year 2015. The International Monetary Fund warned in its latest economic forecast Russia’s economy may be in for a prolonged contraction. "In Russia, the economy is expected to contract by 3.8 percent this year, reflecting the interaction of falling […]

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U.S. states feeling pain of low oil prices

Low crude oil prices should take a toll on state economies if the slump continues, Fitch Ratings says. File photo by Gary C. Caskey/UPI NEW YORK, Oct. 14 (UPI) — The low price of crude oil is starting to eat away at the revenue stream for U.S. states that depend heavily on the energy sector, Fitch Ratings said. West Texas Intermediate, the U.S. benchmark for crude oil prices, closed Tuesday at $46.66 per barrel, down about 45 percent from one year ago. That’s forced energy companies to cut staff and spending on exploration and production in an effort to navigate the downturn. Fitch Ratings said that, as crude oil prices struggle to break the psychological threshold of $50, revenue streams are drying up for states that depend heavily on oil. "Stagnant commodity price trends are dampening energy states’ economic growth and are eating into economically sensitive revenue sources such […]

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Platts: No change from OPEC expected

Platts survey of oil landscape finds few signs OPEC will reverse market course when its members meet in December. Photo by Pattie Steib/Shutterstock LONDON, Oct. 14 (UPI) — A survey from energy reporting group Platts finds few indications the Organization of Petroleum Exporting Countries will cut production for 2016. OPEC said in its latest monthly market report output from member states in September increased by 109,000 barrels per day for an average 31.6 million bpd. Declines elsewhere, however, meant the global oil supply fell by 340,000 bpd to average 94.2 million bpd. According to an emailed report from Platts, however, output from OPEC fell 60,000 bpd because of declines from Saudi Arabia. By OPEC’s own accounting, production from Saudi Arabia showed the largest drop of the 12 member states with 48,000 bpd, according to secondary sources. Platts found a similar drop in Saudi output by referencing information from oil […]

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Natural gas pipelines under construction will move gas from Azerbaijan to southern Europe

Source: U.S. Energy Information Administration and IHS EDIN Construction or preliminary work has begun on three new pipelines designed to flow new supplies of natural gas from Azerbaijan to consumers in Turkey, Bulgaria, Greece, and Italy. For more than a decade, companies have been announcing proposals to build new natural gas pipelines to connect natural gas resources in Russia, Central Asia, and the Middle East with consumers in southern Europe. In contrast to the three new pipelines considered in this article, most of these projects have failed to advance. These three new or expanded pipelines would reach from Azerbaijan’s eastern edge on the Caspian Sea to Italy’s southeastern shore. The South Caucasus Pipeline Expansion (SCPX), from Azerbaijan to the Georgia-Turkey border, began construction in Azerbaijan at the end of June. The Trans-Anatolian Natural Gas Pipeline (TANAP), from the Georgia-Turkey border to the Turkey-Greece border, officially started construction in March […]

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Oil unlikely to ever be fully exploited because of climate concerns – BP

BP’s chief economist says that burning existing fossil fuel reserves would not be consistent with limiting global warming to 2C, as governments have pledged to do. Photograph: Ben Stansall/AFP/Getty Images The world’s oil resources are unlikely to ever be fully exploited, BP has admitted, due to international concern about climate change. The statement, by the group’s chief economist, is the clearest acknowledgement yet by a major fossil fuel company that some coal, oil and gas will have to remain in the ground if dangerous global warming is to be avoided. “Oil is not likely to be exhausted,” said Spencer Dale in a speech in London . Dale, who chief economist at the Bank of England until 2014, said: “What has changed in recent years is the growing recognition [of] concerns about carbon emissions and climate change.” Scientists have warned that most existing fossil fuel reserves must stay in the […]

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Strategist: We’ve Hit ‘Peak Negativity’ in the Energy Sector

Ratcheting oil prices up higher. Earlier this year, Bank of Montreal Chief Investment Strategist Brian Belski called energy stocks a value trap . He has become more constructive, upgrading the sector to market weight, from underweight. A confluence of factors influenced the strategist’s decision to "neutralize" his portfolio position for both U.S. and Canadian energy stocks. The first is that the sector has reached what he called "peak negativity," underperforming the Standard & Poor’s 500-stock index by the most since 1986, when the last supply side-driven crash in oil prices occurred. Second, a prolonged period of low oil prices is now baked into analysts’ earnings expectations, although some Canadian analysts will probably have to ratchet down their estimates even farther. "Earnings per share revisions are one of our most trusted contrarian indicators and the fact that they have hit extreme negative levels is encouraging to us for sector performance […]

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New Concern Over Quakes in Oklahoma Near a Hub of U.S. Oil

A sharp earthquake in central Oklahoma last weekend has raised fresh concern about the security of a vast crude oil storage complex, close to the quake’s center, that sits at the crossroads of the nation’s oil pipeline network. The magnitude 4.5 quake struck Saturday afternoon about three miles northwest of Cushing, roughly midway between Oklahoma City and Tulsa. The town of about 8,000 people is home to the so-called Cushing Hub, a sprawling tank farm that is among the largest oil storage facilities in the world. Scientists reported in a paper published online last month that a large earthquake near the storage hub “could seriously damage storage tanks and pipelines.” Saturday’s quake continues a worrisome pattern of moderate quakes, suggesting that a large earthquake is more than a passing concern, the lead author of that study, Daniel McNamara, said in an interview. “When we see these fault systems producing […]

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Oil supply shock, food shortages, and potential starvation in Sweden?

In 2013 the Swedish Institute of Agricultural and Environmental Engineering (JTI) released a report about potential impacts on the country’s food supply from sudden oil import shocks. JTI looked at three different scenarios, where oil imports would be redistricted (-25%, -50%, -75%) for a period of 3-5 years. Not enough time to make a transition to some other fuel. In the worst case scenario, where 75% of oil imports disappear, the authors stated that the diesel price could increase to some SEK 160/litre, and we would likely experience widespread starvation! Food supplies, in stores and warehouses, would only last for 10-12 days. Swedes don’t even know that the government has said that it’s up to the citizens themself to provide for their own food needs in a crisis situation. Most people seem to believe we still live in the 1970s when Sweden was a socialist country, not any more, […]

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BP Smacks Down ‘Peak Oil’ Fears

Fear over the environmental impact of using oil, gas and coal reserves means we may never run out of untapped energy stores, according to a leading petroleum industry economist. “Concerns about carbon emissions and climate change mean that it is increasingly unlikely that the world’s reserves of oil will ever be exhausted,” BP Chief Economist Spencer Dale told the Society of Business Economists Tuesday. This means the relative price of oil will not necessarily increase overtime, reports Reuters. Spencer’s remarks come amid concerns that an oversupply of oil is pushing the price of crude back under $50 a barrel. Global oil demand is slipping, at a time when supply is high, The Wall Street Journal reports . This is putting downward pressure on oil prices. Consulting firm PVM oil broker David Hufton told The WSJ oil prices could be higher, “as long as OPEC do not produce more than […]

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Oil Prices Recover Some Ground But Long-Term Problems Remain

LONDON—Oil prices rebounded on Tuesday following positive import numbers out of China, but the market was reminded of its longer term problems as a top energy watchdog said the global glut in the commodity will continue into 2016. Prices received support from Chinese data showing an increase in crude imports last month and as some investors bargain-hunted following oil’s 5% slump on Monday. The International Energy Agency, which represents some of the world’s largest oil consumers, said Tuesday that oil demand will slow next year while supply will continue to be strong amid an expected return of Iranian crude to the market. “The market may be off balance for a while longer,” the Paris-based agency said in its monthly report. Brent crude, the global oil benchmark, rose 1.3% to $50.88 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading […]

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No Sea Change for Oil: Liam Denning

There’s something in the water. It’s oil. On boats. That isn’t good if you’re betting on prices to rally. In its latest monthly report, out Tuesday, the International Energy Agency mentioned that some oil at European and Asian trading hubs was now being stored on vessels, despite prices not really justifying the cost. The implication is that regular storage tanks are getting a tad full. With oil prices having traded in a band between roughly $40 to $50 a barrel for about three months, some prominent voices say that the bottom is in. Granted, that “some” includes OPEC ministers, for whom predicting a rebound in prices is a little like Ronald McDonald forecasting a bull market in hamburgers. Still, with global oil demand projected to be up by a hefty 1.8 million barrels a day this year, and with low prices clearly starting to eat away at the U.S. […]

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Oil Seen Below $100 Until 2020 by Ex-IEA Chief Due to U.S. Shale

Oil prices won’t rebound to $100 a barrel before 2020 to 2025, when U.S. shale production will gradually start to decline, according to a former head of the International Energy Agency. Demand for crude in China, India, Southeast Asia and Africa will drive up global prices in the “long term,” Nobuo Tanaka, who served for four years as the IEA’s executive director, said in an interview in Abu Dhabi. Tanaka left the IEA, an advisory body to the world’s industrialized nations, in September 2011 and currently works as a professor at the University of Tokyo School of Public Policy. “Price will not go up to a hundred as easily as before,” Tanaka said. “The shale production in the U.S. will gradually slow down after 2020 or 2025, so again there’s a chance of higher prices coming after that.” Brent crude, a global pricing benchmark, dropped 44 percent in the […]

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Oil price forecasts: should we score their accuracy?

A taxi drives past a LED sign at a petrol station displaying its current fuel prices in yen in Tokyo August 24, 2015. Who is the top forecaster in the oil market? The surprising answer is that nobody knows because the accuracy of predictions is never properly tracked and measured after they are made. Banks, consultancies, government agencies and even journalists routinely issue predictions about what will happen to oil supply, demand and prices in future. Forecasts about the trajectory of prices over the next few months and years drive decisions affecting billions of dollars of investment. Oil companies rely on them to decide whether to drill more wells, develop new fields and hedge their future production. Consumers rely on them in deciding whether to buy a small fuel-efficient car or a gas-guzzler. Governments need them to produce revenue estimates and budgets. Expectations about oil prices are among the […]

Posted On : Published By : Tom Whipple