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IEA Sees Oil Market Remaining Oversupplied Next Year

A top energy watchdog Tuesday warned that oil markets would likely remain oversupplied next year, as oil demand growth slows down amid an expected return of Iranian oil. The assessment by the International Energy Agency–which represents some of the world’s largest oil consumers–is somewhat less upbeat than the Organization of the Petroleum Exporting Countries which Monday said oil markets would start to rebalance themselves next year amid declining U.S. production. In its closely watched monthly oil market report, the IEA cut its forecast for oil demand growth for next year by about 200,000 barrels a day compared with its previous assessment in September. It now sees world oil consumption rising by 1.2 million barrels a day in 2016, compared with a five-year-high growth of 1.8 million barrels a day in 2015. “A projected marked slowdown in demand growth next year and the anticipated arrival of additional Iranian barrels-–should international […]

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A $70 oil floor? Fat chance, but OPEC price plan may be first step

An oil pump is seen in Lagunillas, Ciudad Ojeda, in the state of Zulia, Venezuela, March 18, 2015. The safe money for oil traders is betting that Venezuela’s plan to resurrect OPEC’s old price band mechanism, attempting to set a $70 floor for the battered market, will be doomed from the start. Saudi Arabia, the group’s de facto leader, has shown zero interest in returning to a strategy of supporting prices; big producers outside the Organization of Petroleum Exporting Countries, namely Russia, have essentially ruled out cuts. And most analysts say attempting to set a price range is futile, or that the $70 price is unsustainably high, or both. Yet a handful of experts and observers say the proposal – articulated by former oil minister Rafael Ramirez in an interview with Reuters – may be a catalyst for moving away from OPEC’s laissez faire approach to collapsing oil prices, […]

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UBS Sees Sovereign Assets Shrinking by $1.2 Trillion

Central bank and sovereign wealth fund assets will shrink by $1.2 trillion, or almost 7 percent, by the end of the year as China and petrostates including Russia and Saudi Arabia dip into their savings amid slower growth and lower crude revenues, according to UBS Group AG. The decline will be driven by China withdrawing its foreign exchange reserves, while oil-producing countries tap foreign assets to support government spending, Massimiliano Castelli, head of global strategy at UBS Asset Management, said in a phone interview from Zurich Tuesday. The fall in sovereign assets will likely continue into next year and also be driven by an expected drop in investment returns, he said. Assets held by central banks and sovereign wealth funds amounted to more than $18 trillion at the end of 2014, according to UBS. Sovereign wealth funds from Oslo to Riyadh and Doha to Moscow are preparing to withdraw […]

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These Three Trends Have Radically Redefined the Energy Market

Michael Liebreich, the founder of Bloomberg New Energy Finance, set out the trends upending the global energy markets and ushering in what he termed an “age of plenty.” He said: 1. Cheap fossil fuels are here to stay because production costs are tumbling. 2. Intermittent renewables will dominate electricity supply by 2040, with huge challenges for grid managers. 3. Electricity demand is flattening out, losing its link with economic growth. The implication is that energy will be plentiful for years to come, Liebreich said in a presentation Tuesday at the research group’s conference in London. Oil will linger closer to $50 a barrel than to $90, and renewables will gain market share, he said. “There has been an enormous amount of innovation in the unconventional gas industry,” Liebreich said. “The cost reductions have been similar to what’s happening in solar.” Here’s what he identified: The cost of shale gas […]

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Syrian rebels pour men and missiles into frontlines

Rebel fighters carry their weapons as they head toward their positions in the town of Kafr Nabudah, in Hama province, Syria, on which forces loyal to Syria’s President Bashar al-Assad are carrying out offensives to take control of the town, October 11, 2015. Insurgents in Syria are deploying more men and weapons, including significant quantities of anti-tank missiles, to resist ground attacks by the Syrian army and its allies, backed by Russian air strikes, rebels and a monitoring group said on Tuesday. With help from Lebanon’s Hezbollah and Iranian soldiers, Syria is trying to drive insurgents from western areas that are crucial to President Bashar al-Assad’s survival, and has recaptured a number of towns in the provinces of Hama and Latakia. The Syrian Observatory for Human Rights, a British-based group tracking the war, said a battle continued for control of the town of Kafr Nabuda in Hama province, which […]

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Moroccan shale giving up gas

Circle Oil says it’s seeing success in efforts to draw gas out of Moroccan shale basins. File photo by Terry Schmitt/UPI LIMERICK, Ireland, Oct. 13 (UPI) — Irish energy company Circle Oil, which focuses on North African basins, said it had remarkable success with the early results from shale basins in Morocco. Circle Oil said preliminary drilling results from its Sebou concessions in Morocco yielded about 8 million cubic feet of natural gas per day. Chief Executive Mitch Flegg said in a statement the results came in better than expected . "The flow rates achieved during the well test are at the upper end of our range of expectations and the well will now be tied in to our existing infrastructure and put into production as soon as possible," he said. "This gas will be sold at fixed rates which are not subject to oil price fluctuations." Morocco is […]

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Tecnicas Among Companies to Build $16 Billion Al Zour Refinery

Daewoo Engineering & Construction Co., Tecnicas Reunidas SA and Hyundai Heavy Industries Co. are among companies that signed contracts today to build Kuwait’s $16 billion Al Zour oil refinery, which will more than double the nation’s processing capacity. The refinery, with a capacity of 615,000 barrels a day, will raise Kuwait total refining capacity to 1.4 million barrels a day when completed in July 2019, Mohammad Ghazi Al-Mutairi, chief executive officer of state-owned Kuwait National Petroleum Co., said at the signing ceremony in Kuwait City. Al Zour refinery, valued at 4.87 billion dinars ($16 billion) will be integrated with a planned petrochemical complex which KNPC will discuss at an upcoming board meeting, he said. “Al Zour refinery is one of the world’s largest grass root plants being built from conceptual stage,” Al-Mutairi said. “Al Zour refinery along with other ongoing mega projects will change the landscape of the oil […]

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Saudi Stability Is Issue for World Oil, Harvard’s Ferguson Says

Harvard University history professor Niall Ferguson said “a lot is going wrong” in Saudi Arabia and its fiscal position is a “total mess.” “The big question, for example, that hovers over the world oil market is the stability of the Saudi regime ,” Ferguson said Tuesday in an interview on Bloomberg Television. “And if you do follow that, which I do, you start to get nervous because a lot is going wrong in that country.” Niall Ferguson Saudi Arabia is ordering a series of cost-cutting measures as the slide in oil prices weighs on the kingdom’s budget, two people with knowledge of the matter said last week. With oil accounting for about 90 percent of revenue in the Arab world’s largest economy, a drop of more than 40 percent in crude prices in the past 12 months has combined with wars in Yemen and Syria to pressure Saudi Arabia’s […]

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Entergy Plans to Shut Down Pilgrim Nuclear Plant by June 2019

The New Orleans-based company, which owns utilities in Arkansas, Louisiana, Mississippi and Texas, and sells power on the wholesale market, has been pressured by low U.S. natural-gas prices that have pushed wholesale power prices lower. In its news release Tuesday, Entergy said the exact timing, which depends on several factors, including discussions with regulators, would be decided during the first half of next year. Entergy said current and forecast power prices have fallen about $10 per megawatt hour, representing an annual loss of more than $40 million in revenue for the Pilgrim plant, located in Plymouth, Mass. The plant had been expected to post net operating losses ranging from roughly $10 million to $30 million for this year, next year and 2017—before accounting for additional costs related to the decision to close the plant and any potential write-downs. Once the plant is shut down, Pilgrim will transition to decommissioning. […]

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Bakken Production Down plus IEA Predictions

ND & Bakken Bakken production was down 19,502 bpd in August while all North Dakota was down 20,552 bpd. Here is an amplified chart of Bakken and all North Dakota production. ND & Bakken BPW Bakken barrels per well per day is now 112 while all North Dakota gets 94 barrels per well per day. North Dakota Change in BPD This chart shows the monthly change in North Dakota production. It is likely that by next month the 12 month average change in production will be negative. Bakken wells producing increased by 69 and ND wells producing increased by 65. From the Director’s Cut July Permitting: 233 drilling and 0 seismic Aug Permitting: 153 drilling and 1 seismic Sep Permitting: 154 drilling and 1 seismic July Sweet Crude Price1 = $39.41/barrel Aug Sweet Crude Price = $29.52/barrel Sep Sweet Crude Price = $31.17/barrel Today’s Sweet Crude Price = $35.00/barrel […]

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A cyclone brews over Saudi Arabia

Saudi King Salman, 79, in Riyadh on Tuesday. (Kenzo Tribouillard/Agence France-Presse via Getty Images) An internal political storm is roiling Saudi Arabia, as the crown prince and his deputy jockey for power under an aging King Salman — while some other members of the royal family agitate on behalf of a third senior prince who they claim would have wider family support. For the secretive oil kingdom, whose internal debates are usually opaque to outsiders, the recent strife has been unusually open. The tension between Crown Prince Mohammed bin Nayef and his deputy, Mohammed bin Salman (the king’s son), is gossiped about across the Arab world. Dissenters from the royal family have begun circulating open letters that have drawn tens of thousands of readers online. Succession worries were in the background in early September when Salman, 79, visited Washington , accompanied by son Mohammed bin Salman , 30. U.S. […]

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Commodity Export Deluge Takes Gloss Off China’s Buying Spree

China’s resurgent commodity imports are a boon for producers around the world. The flood of exports is less so. While total imports shrank in yuan terms, the world’s biggest consumer of energy, metals and grains bought more iron ore, crude oil and copper in September amid sliding prices, customs data showed Tuesday. The challenge for the world’s commodities markets is that was accompanied by record exports of steel, the most shipments of oil products since 2009 and higher aluminum sales, even as total overseas sales slid. The latest batch of trade data shows how China is making the most of the collapse in commodity prices to keep its metals plants and oil refineries running amid slowing domestic demand. The flood of cheap exports are threatening mills from India to Pennsylvania, aggravating trade disputes and worsening a glut of diesel extending from Singapore to Europe. “The increase in imports doesn’t […]

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Former Chinese Oil Executive Sentenced for Corruption

A Chinese court on Tuesday sentenced a former senior executive of a state oil company to 20 years in prison after finding him guilty of corruption. The sentencing of Wang Yongchun, a former deputy general manager of China National Petroleum Corp., came a day after a former CNPC chairman, Jiang Jiemin , was given 16 years’ imprisonment for corruption . The Xiangyang Intermediate People’s Court in central China said Mr. Wang received 49 million yuan ($7.9 million) in bribes between 2000 and 2013 and failed to explain the source of another 42 million yuan. It said Mr. Wang—at Mr. Jiang’s direction—provided assistance to others, causing huge losses to the state. China’s oil industry has been targeted in a sweeping anti-graft campaign that has toppled many high-ranking officials of state companies. The oil industry used to be a power base for Zhou Yongkang, a retired member of the all-powerful standing […]

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China third-quarter growth seen dipping to 6.8 percent, weakest since 2009

A customer pushes a cart at a supermarket in Fuyang, Anhui province, August 9, 2015. China’s economic growth is expected to fall below 7 percent for the first time since the global financial crisis in the third quarter, putting pressure on policymakers to roll out more support measures as fears of a sharper slowdown spook investors. Chinese leaders have been trying to reassure global markets that Beijing is able to manage the world’s second-largest economy after a shock devaluation of the yuan CNY=CFXS and a summer stock market plunge fanned fears of a hard landing. But even the government concedes the economy is entering a slower growth phase after decades of breakneck expansion. Growth in third-quarter gross domestic product (GDP) likely slowed to 6.8 percent from the same period last year, down from 7 percent in the second quarter, according to a Reuters poll of 50 economists. That would […]

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China heads for record crude buying year as cargoes snapped up

A security personnel stands guard at the Yanshan oil refinery of Sinopec Corp. in Beijing May 31, 2011. As China closes in on the United States as the world’s biggest crude oil importer, demand from private refiners and stockpiling of cheap oil is expected to keep imports at record levels after a wobble in the third quarter. Despite slower growth in recent months – crude imports rose just 1.3 percent in September on a year earlier – buying for October-November delivery has picked up strongly, traders and analysts say. The purchases will ease concerns of a sharp slowdown in Chinese buying and support prices in coming months, analysts said. The increased buying has shown up in tanker movements and freight rates, said Energy Aspects analyst Virendra Chauhan, and analysts are upgrading earlier forecasts for second half growth. "Despite a slowing Chinese economy, crude imports remain robust on the back […]

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Pennsylvania law okays treated coal-mining water for frac jobs

Pennsylvania Gov. Tom Wolf signed into law a bill intended to encourage more oil and gas companies to use treated coal-mine wastewater for hydraulic fracturing . The law was scheduled to become effective in December. Consol Energy operates coal mines in southwestern Pennsylvania as well as developing and producing natural gas from the Marcellus and Utica shales . Consol Energy already had used wastewaste from its coal mines for fracturing, a company spokesman said. The new law is intended to encourage other gas operators to use treated mine water instead of fresh water. The use of mine water for fracing was among recommendations made by former Gov. Tom Corbett’s Marcellus Shale Advisory Commission. In 2013, the Pennsylvania Department of Environmental Protection issued a white paper to promote the practice. Pennsylvania Department of Environmental Protection officials supported the legislation. Previously, oil and gas companies were reluctant to use treated mine […]

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U.S. shale oil output to fall by most on record in November: EIA

A pump jack operates at a well site leased by Devon Energy Production Company near Guthrie, Oklahoma September 15, 2015. U.S. shale production is expected to fall the most on record in November, extending a nationwide output decline into its seventh consecutive month, according to a forecast on Tuesday from the U.S. Energy Information Administration. Total output is set to fall by more than 93,000 barrels per day (bpd) to 5.12 million bpd, according to the EIA’s monthly drilling productivity report. That’s the largest monthly cut forecast since data was available in 2007. Oil production from the Eagle Ford play in South Texas was expected to fall 71,000 bpd to 1.37 million bpd. Bakken oil output in North Dakota was expected to slide 23,000 bpd to 1.16 million bpd. Oil production from the Permian Basin of West Texas, which continues to buck the trend, was projected to rise 21,000 […]

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Repsol Drilling Delay Adds to Oil Patch Chill on Alaska Shore

A restructuring of Repsol SA’s Alaska drilling project is adding to the state’s woes in the midst of the biggest oil slump since 2009. Repsol sold stakes in development and exploratory acreage in northern Alaska to its partner, Armstrong Oil & Gas Inc., for more than $800 million, according to a statement from Armstrong. The companies will defer the 2015-2016 drilling campaign initially scheduled to start this winter as part of the restructuring. As many as 500 workers on the state’s North Shore could lose their jobs in the restructuring, according to Anchorage, Alaska-based KTUU television station , citing comments from Repsol spokeswoman Jan Sieving. The restructuring comes a month after ConocoPhillips announced it would cut about 10 percent of its workforce, including 120 jobs in Alaska. The state has been hit hard by crude prices falling more than 50 percent from last year’s peak amid a global glut. […]

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Lenders Yank Credit From Struggling U.S. Oil Company

Lenders slashed a Denver energy company’s credit line to less than its outstanding balance, in one of the harshest cuts yet to a U.S. oil producer’s collateral-backed loans. Emerald Oil EOX -24.45 % Inc., which produces oil in North Dakota and Montana, said late Monday that its lenders have reduced its credit by 40%, to $120 million. It is in talks with those banks about how to pay back the roughly $20 million by which it is now overdrawn and is trying to find alternative financing, the company said. The credit-line cut is the second for Emerald this year and comes amid the second of a twice-annual review by banks of the oil-and-gas reserves that serve as collateral for loans. Over the last year as oil prices plummeted, banks have been reducing the amount they lend to companies across the country. “It looks as if the borrowing base bogeyman […]

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Germany: Russia a key energy partner

German company BASF says Russia will retain a strong role in the European energy market. File Photo by UPI/Shutterstock/Kodda ST. PETERSBURG, Russia, Oct. 13 (UPI) — Russia will remain a key oil and natural gas supplier through its strong connections to the European market, the chairman of Germany’s BASF said. "Our cooperation makes outstanding contribution towards securing energy supplies to Europe," BASF Chairman Kurt Bock said in a statement. BASF subsidiary Wintershall is a partner to Russian energy company Gazprom in the Nord Stream natural gas pipeline running through the Baltic Sea to the German coast and sending Russian natural gas into the European market. Gazprom in early September signed a shareholder agreement on the development of the second phase of the twin Nord Stream pipeline system in the Baltic Sea with German energy companies BASF and E.ON, French company ENGIE, Austria’s OMV and Royal Dutch Shell. Under the […]

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Ruble Drops as Nabiullina Warns on Russia’s Crude Oil Dependence

The ruble had its longest streak of declines in a month after crude slumped and as Russia’s central bank Governor Elvira Nabiullina warned the currency is too dependent on oil-price swings. Brent’s 5.3 percent tumble on Monday contributed to the Russian currency’s drop against the dollar today, trimming a month-to-date gain. Russia relies on crude and natural gas exports for almost half of its budget revenue and the correlation between the ruble’s movements and oil is close to a record. “The exchange rate largely repeats the movements of oil,” Nabiullina said in an interview with Bloomberg Television at an investor conference in Moscow today. “To bring an end to them moving in sync, the economy needs to be diversified.” The Russian currency traded down 0.4 percent at 62.5100 as of 7:12 p.m. in Moscow, dropping for a third day. Government ruble bonds fell for a second day, lifting the […]

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Russia calls Saudi oil to East Europe ‘toughest competition’

Russia’s Energy Minister Alexander Novak arrives at the European Commission headquarters in Brussels ahead of a meeting with EU officials March 2, 2015. Russian Energy Minister Alexander Novak said on Wednesday that Saudi Arabia’s entry into East European oil markets, traditionally dominated by Russia, was the "toughest competition". "Every country has the right to sell where it thinks necessary. This is a competition, the toughest competition is going on now," Novak told reporters. Saudi Arabia has started supplying crude to Poland, the head of Russia’s biggest oil company, Rosneft, said on Tuesday, becoming another Middle Eastern producer to enter a market traditionally supplied mostly by Russia. A global battle for market share is under way among oil exporters. Those with the deepest pockets, such as Saudi Arabia, are using low prices to enter new markets – often at the expense of Russia, one of the world’s top crude producers. […]

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$50 Oil for 15 Years Isn’t What Scares Bank of Russia Governor

Fifteen years of oil at $50 a barrel isn’t the worst nightmare for Russian central bank Governor Elvira Nabiullina. “What worries me more is the pace of reforms in the economy that could stimulate private investment,” Nabiullina, 51, said in a Bloomberg Television interview on Tuesday. “What’s very important is a whole set of conditions to make Russia more attractive to private investments. And what’s worrisome is the pace of such changes.” Elvira Nabiullina It’s a shot across the bow to President Vladimir Putin, who’s faced growing pressure from inside and outside the government for new measures to pull the world’s largest energy exporter out of its first recession in six years. While Russia has adjusted to the collapse in oil prices by allowing the ruble to lose almost half its value since January 2014 and letting consumer demand bear the brunt of the downturn, its economy remains hamstrung […]

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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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Oil Halts Slide as Rebound in China Crude Imports Buoys Outlook

Oil halted its decline after falling the most in six weeks as signs of rising demand in China countered an increase in OPEC production. Futures climbed as much as 1.3 percent in New York after Monday’s 5.1 percent drop. China’s crude purchases rebounded in September from a three-month low even as total imports extended a slump. Global oil consumption is expanding while non-OPEC nations will supply less, according to Abdalla Salem El-Badri, the secretary-general of the Organization of Petroleum Exporting Countries. Oil advanced above $50 a barrel last week for the first time since July but has failed to sustain gains amid speculation the market could remain oversupplied. China’s economic slowdown is still impacting on global growth amid this year’s plunge in commodity prices. OPEC raised its production to the highest level since 2012 as it predicted stronger demand for its crude. “Any rally in oil is going to […]

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NYMEX November natural gas futures settle at $2.535/MMBtu, up 3.3 cents

The NYMEX November natural gas futures contract rose 3.3 cents to settle at $2.535/MMBtu, as weather forecasts called for the possibility of increased heating demand in the Northeast. "It is looking more and more like the [$2.50/MMBtu] mark is the marginal cost of production ‘average’ floor. In a bearish market like this one, that means it becomes a pivot," ICAP Energy Vice President Drew Wozniak said in an email. The November contract has made small gains in each of the last five trading sessions. "The natural gas market is also trying to establish a bottom, with [Commodity Futures Trading Commission] data showing a managed money net short exposure [that is] the largest in more than five years, a significant oversold condition," Citi Futures energy futures specialist Tim Evans said in an email. "Overall, we continue to have a bullish bias, with limited downside and increased upside from current levels […]

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Oil Surplus to Persist in 2016 as IEA Sees Demand Growth Slowing

Global oil markets will remain oversupplied next year as demand growth slows and Iranian exports are poised to recover with the lifting of sanctions, the International Energy Agency said. While supplies outside OPEC will decline in 2016 in response to lower prices, demand growth will ease from this year’s five-year high amid a weaker outlook for the world economy, allowing the crude surplus to endure, the IEA predicted. Iran could swell the glut if restrictions on its sales are removed with the completion of a nuclear accord, while Iraq has replaced the U.S. as the biggest source of new supplies as its output reaches record levels. “The market may be off balance for a while longer,” the Paris-based adviser to 29 nations said in its monthly report. “A projected marked slowdown in demand growth next year and the anticipated arrival of additional Iranian barrels — should international sanctions be […]

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Oil glut to persist as global growth demand slows: IEA

A pump jack is seen at sunrise near Bakersfield, California October 14, 2014. A global oil supply glut will persist through 2016 as demand growth slows from a five-year high and key OPEC producers maintain near-record output, the International Energy Agency said on Tuesday, even as low prices curb supply outside OPEC. The IEA, which advises industrialized countries on energy policy, said in a monthly report that world oil demand will rise by 1.21 million barrels per day (bpd) in 2016, down 150,000 bpd from last month’s forecast. "A projected marked slowdown in demand growth next year and the anticipated arrival of additional Iranian barrels – should international sanctions be eased – are likely to keep the market oversupplied through 2016," the Paris-based IEA said. A drop in oil prices because of abundant supply to just over $50 a barrel – half the level of June 2014 – has […]

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IEA Sees Oil Market Remaining Oversupplied Next Year

A top energy watchdog Tuesday warned that oil markets would likely remain oversupplied next year, as oil demand growth slows down amid an expected return of Iranian oil. The assessment by the International Energy Agency–which represents some of the world’s largest oil consumers–is somewhat less upbeat than the Organization of the Petroleum Exporting Countries which Monday said oil markets would start to rebalance themselves next year amid declining U.S. production. In its closely watched monthly oil market report, the IEA cut its forecast for oil demand growth for next year by about 200,000 barrels a day compared with its previous assessment in September. It now sees world oil consumption rising by 1.2 million barrels a day in 2016, compared with a five-year-high growth of 1.8 million barrels a day in 2015. “A projected marked slowdown in demand growth next year and the anticipated arrival of additional Iranian barrels-–should international […]

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Oil Market Report

mb/d World Oil Demand *Please note that these Highlights are from the latest Oil Market Report, which is released in full to subscribers only – according to this schedule each month . Non subscribers get free access to the latest Highlights on this schedule, however the full Oil Market Report is released to the public two weeks after the report is released to subscribers. If you would like to receive the full report with accompanying charts and graphs on the day of publication please subscribe or contact the subscription manager . After a relatively stable month in September, crude oil price benchmarks rallied in early October on expectations of lower US output and rising tension in the Middle East. At the time of writing, ICE Brent was trading at $51.90/bbl with NYMEX WTI lower at $48.80/bbl. Global demand growth is expected to slow from its five-year high of 1.8 […]

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OPEC Crude Little Change

The OPEC Monthly Oil Market Report is just out with the crude only production numbers for the 12 OPEC countries. The data below is in thousand barrels per day and the last data point is September 2015. OPEC 12 OPEC 12 crude only production was up 109,000 barrels per day in September but that was after the August production numbers were revised down by 82,000 bpd. OPEC crude only production now stands at 31,571,000 pbd. That is just 12,000 bpd above June production but still 100,000 bpd below their peak in July of 2008. Saudi Arabia Saudi Arabia was down 48,000 bpd in September to 10,225,000 bpd. That is 174,000 bpd below their latest peak in June. The big gainer in September was Iraq, up 80,100 bpd in September. That is still 5,000 bpd below their latest peak in July. The UAE hit a new high in September, up […]

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OPEC Sees U.S. Oil Output Dropping Next Year

U.S. oil output will decline in 2016 for the first time in eight years as producers slash spending, the Organization of the Petroleum Exporting Countries said Monday, while the producer group continues pumping at high levels . In its closely watched monthly oil market report, OPEC slashed its U.S. oil production forecast by 280,000 barrels a day next year, to 13.538 million barrels a day, a number that includes natural gas liquids. That would be about 60,000 barrels a day less than in 2015, the first decline since 2008. The finding is consistent with what the U.S. Energy Information Administration said last week, predicting that U.S. crude production would average about 8.9 million barrels a day in 2016, down from 9.2 million barrels a day in 2015. OPEC said lower oil prices were forcing U.S. oil producers to cut spending and causing their wells to deplete faster than expected. […]

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OPEC Sees U.S. Oil Output Falling for First Time in Eight Years

The Permian Basin in Mentone, Texas. U.S. crude output peaked at 9.6 million barrels a day in April U.S. oil production is projected to decrease in 2016 for the first time in eight years, according to OPEC. Total output of crude and natural gas liquids is forecast to fall 0.5 percent to 12.47 million barrels a day next year, the Organization of Petroleum Exporting Countries said in its monthly market report Monday. The decline is being driven by the fall in prices, which has curbed spending, OPEC said. U.S. oil drillers have idled more than half the nation’s rigs since last October, data from oilfield-services company Baker Hughes Inc. shows. "What happens with shale production next year is highly uncertain," Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by phone. "Recent reports on drilling and production justify a pessimistic forecast. It’s not surprising that […]

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OPEC Pumps Most Crude in Three Years as It Lifts Demand Forecast

OPEC pumped the most crude in three years as it predicted stronger demand for its oil in 2016 while supplies elsewhere falter. The Organization of Petroleum Exporting Countries said it pumped 31.57 million barrels a day last month, the most since 2012, according to its monthly market report. OPEC sees production outside the group shrinking by 130,000 barrels a day next year as the U.S. shale boom sputters. “The oil industry has experienced a rapid fall in global upstream spending,” OPEC’s Vienna-based secretariat said. “In 2016, the postponing or canceling of upstream projections will likely continue, resulting in contraction” of supplies. Oil prices have rallied about 10 percent in the past month as drilling cutbacks in the U.S. and reduced energy investment globally suggest the surplus in world oil markets will eventually dissipate. OPEC Secretary-General Abdalla Salem El-Badri said in Kuwait on Monday that the market may be “balanced” […]

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IEA Expects Iraqi Oil Output to Remain `Broadly Flat’ Next Year

Oil production from Iraq, the world’s fastest source of supply growth last quarter, will remain similar to current levels next year as the slump in crude prices and the cost of fighting Islamic State militants hamper the government’s ability to invest in new capacity, the International Energy Agency said. Volumes are expected to stay at about 4.2 million barrels a day, matching third-quarter output, the IEA said in its monthly report. While the country has “performed better than many had anticipated,” there are signs of strain, the agency said. Iraq, the biggest producer in the Organization of Petroleum Exporting Countries after Saudi Arabia, pumped a record 4.4 million barrels a day in June, according to data compiled by Bloomberg. Output last quarter rose by a third from a year earlier, the world’s fastest supply growth, according to the IEA. “Oil’s collapse and Iraq’s severe financial crisis have forced the […]

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Iranian parliament passes bill approving nuclear deal: IRNA

Iran’s President Hassan Rouhani addresses a plenary meeting of the United Nations Sustainable Development Summit 2015 at the United Nations headquarters in Manhattan, New York September 26, 2015. Iran’s parliament passed a bill on Tuesday supporting the government in implementing a nuclear deal with world powers, but insisted that international inspectors would have only limited access to Iran’s military sites, state news agency IRNA said. "The bill to implement the JCPOA … was passed in a public session on Tuesday with 161 votes in favor," IRNA said, referring to the Joint Comprehensive Plan of Action reached in July. (Reporting by Sam Wilkin; Editing by Paul Tait )

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Insurgents shell Russian embassy in Syria during rally

AP Photo/Muzaffar Salman DAMASCUS, Syria (AP) — Insurgents fired two shells at the Russian embassy in the Syrian capital on Tuesday as hundreds of pro-government supporters gathered outside the compound to thank Moscow for its intervention in Syria. An Associated Press reporter was outside the embassy when the first shell slammed into the compound in central Damascus and smoke billowed from inside. As people started running away, another shell hit the area. It was not immediately clear if there were casualties. Opposition fighters in the suburbs of the capital have targeted the embassy in the past but it was not clear if Tuesday’s attack targeted the rally. Before the shelling, the demonstrators had gathered outside the embassy carrying posters of the Russian and Syrian presidents, Vladimir Putin and Bashar Assad, and waved the two countries’ flags. Some held placards that read: "Thanks Russia" and "Syria and Russia are together […]

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U.S.-Made Weaponry Is Turning Syrian Conflict Into Proxy War With Russia

Photo Syrian soldiers under attack Sunday in Hama Province. Government troops advanced there Monday, aided by Russian air power. Credit Alexander Kots/Komsomolskaya Pravda, via Associated Press BEIRUT, Lebanon — Insurgent commanders say that since Russia began air attacks in support of the Syrian government, they are receiving for the first time bountiful supplies of powerful American-made antitank missiles. With the enhanced insurgent firepower and with Russia steadily raising the number of airstrikes against the government’s opponents, the Syrian conflict is edging closer to an all-out proxy war between the United States and Russia. The increased levels of support have raised morale on both sides of the conflict, broadening war aims and hardening political positions, making a diplomatic settlement all the more unlikely. The American-made TOW antitank missiles began arriving in the region in 2013, through a covert program run by the United States, Saudi Arabia and other allies to […]

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KRG ruling party ejects rivals, escalating political crisis

Riot police rush to confront protestors in downtown Kalar on Oct. 10, 2015. (AREZ MOHAMMED/Iraq Oil Report) ERBIL – The Kurdistan Regional Government’s (KRG) ruling party has begun using its control of security forces to unilaterally expel its most potent political rivals from government – dramatically destabilizing a region already roiled by war, economic crisis, and popular discontent. Security forces answering to the Kurdistan Democratic Party (KDP) of Massoud Barzani, who continues acting as president after the expiration of his term on Aug. 19, prevented KRG Parliament Speaker Yousif Mohammed, a member of the rival Gorran party, from passing a checkpoint into the Kurdish capital of Erbil on Monday. KDP-aligned forces also barred Gorran ministers from entering government offices. "An effort has been orchestrated as a military coup d’état against the Parliament, a legitimate institution," Mohammed said. KDP leaders said they were reacting to a series of arson attacks […]

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Iranian Lawmakers Approve Nuclear Deal

Iranian parliament approved the general outlines of the nuclear bill on Sunday. DUBAI—Iranian lawmakers on Tuesday approved the implementation of July’s historic nuclear deal with six world powers, removing one of the final obstacles within Iran’s system to the accord. A majority of Iran’s parliament members approved the bill, which directs the government to put the deal in place, according to the official Islamic Republic News Agency. The vote saw 161 in favor of the deal to 59 against, according to IRNA. Thirteen members abstained. The parliament had approved the basic outlines of the bill in a vote on Sunday. All legislation approved by Iran’s parliament must get a final sign-off from the Guardian Council, a powerful 12-member clerical body, before it becomes law. But the final say on all matters of state, including the nuclear deal, rests with Supreme Leader Ayatollah Ali Khamenei. Mr. Khamenei, a hard-line conservative, […]

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Oil Traders Targeting Iran for $1 Billion in 2016 Gasoline Sales

Iran will need to import about 20 percent more gasoline to meet pent-up demand in the first year after economic sanctions are lifted, creating a market for some $1 billion in fuel sales from abroad, according to traders and analysts. The nation with the world’s fifth-largest crude reserves may need to buy about 50,000 barrels a day of gasoline if sanctions are removed in early 2016 as expected, say analysts at consultants Facts Global Energy, IHS Inc. and Energy Aspects Ltd. With its refineries running at full capacity and unable to raise output for at least another year, Iran now imports 41,000 barrels a day, or about 9 percent of the gasoline it uses. Iran was the Persian Gulf region’s biggest gasoline buyer before world powers imposed sanctions over its nuclear program, and it may need to import even more — as much as 70,000 barrels a day, according […]

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Venezuela calls on OPEC to control output, seeks $70 floor price: Ramirez

Rafael Ramirez waves during his meeting with Colombia’s Foreign Minister Maria Angela Holguin in Caracas November 19, 2014. Venezuela this month will unveil a bold new strategy for rescuing ailing oil prices, one lifted from the OPEC’s history books – a price band that would build an automatic floor for prices at $70 a barrel. In an exclusive interview with Reuters, Venezuela’s long-time oil minister and current United Nations ambassador Rafael Ramirez said the proposal – to be presented to a meeting of OPEC technical advisors on Oct. 21 – would reapply the old mechanism of progressive production cuts to control prices, with a "first floor" of $70 per barrel and a later target of $100 per barrel. "We will try to progressively recover the price," he said. The proposal offers the first detailed public insight into Venezuela’s months-long global effort to drum up support for measures to revive […]

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Eni focus on Egypt sharpens

Italian energy company Eni strengthens position in Egypt with two new concessions in the Mediterranean Sea. File photo by Ashraf Mohamad/UPI MILAN, Italy, Oct. 12 (UPI) — Italian energy company Eni said it was building on a legacy position in Mediterranean waters with two new shallow-water concessions offshore Egypt. Eni takes a position alongside British energy company BP and French company Total in the shallow-water Karawan and North Leil blocks off the Egyptian coast. Eni offered no estimate of the reserve potential in the two exploration areas, which combine for 1,280 square miles. The Italian company will serve as the operator of the two basins. "These two new concession agreements follow the recent award of the deep water Karawan and North Leil blocks, strengthening Eni’s presence in Egypt, a country of historic and strategic importance," the Italian company noted. Eni announced a discovery of gas in a deepwater prospect […]

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Saudi offers of extra oil in Asia fail to lure interest in cutthroat market

Saudi Arabia failed to attract offers for additional oil cargoes for loading in October, industry sources said, in a sign that the market remains over supplied despite recent production cuts. The offers were made to some customers in Asia ahead of maintenance at a major Saudi refinery, two sources close to the matter said, as the world’s biggest crude exporter seeks to maintain its market share in Asia. Yet in a sign of the ongoing price war between producers and the surplus supplies, potential buyers who received the offers said they were too prompt in delivery, adding that cheaper alternatives such as Iraq’s Basra crude were also available. "Even if the November OSPs (Official Selling Prices) are attractive, we do not have room to take more," one of the potential buyers said, declining to be named due to company policy. Refinery maintenance across Asia in the third quarter has […]

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OMV finds gas in Pakistan

Austrian energy company OMV finds more gas at inland block in Pakistan. Graphic courtesy of OMV VIENNA, Oct. 12 (UPI) — Austrian energy company OMV said a new natural gas discovery in Sindh province in Pakistan means it could potentially boost production in the energy-starved country. OMV announced the discovery of natural gas in the Latif South-1 exploration well in Pakistan. Preliminary testing yielded about 2,500 barrels of oil equivalent per day. "We are very pleased with this exploration success," Johann Pleininger, an OMV board member in charge of exploration and production, said in a statement. "The appraisal and development of this discovery will potentially enable us to enhance the production in Pakistan." Pakistan’s aging infrastructure means the country lacks a reliable power sector. The Asian Development Bank last month backed a provisional assistance package of at least $1.2 billion per year on average through a partnership with Pakistan […]

Posted On : Published By : Tom Whipple