Oil Servicers Say ‘Fat Trimming’ Will Become New Norm
Oil Servicers Say Fat Trimming Will Become New Norm ABERDEEN, Scotland, Sept 11 (Reuters) – A slump in oil prices is forcing the oil and gas services industry for the first time in 15 years to trim costs in a way that executives say will create a lasting change away from their usual lavish way of doing business. Navigating a new environment in which oil prices have halved in a year and their customers are slashing investments, oil service firms face a rough ride. "The industry has been quite lazy in changing because oil prices have been helping us a lot," Samir Brikho, chief executive of oil service engineering company Amec Foster Wheeler, told Reuters. "At a time like this, you need to take a look at how you can take out the fat. Once we have done this we will never go back, this will become the new […]
IEA sees U.S. oil output collapsing next year on low prices
Lower oil prices will force non-OPEC producers including the United States to cut output by the steepest rate in more than two decades next year, rebalancing an oversupplied oil market, the International Energy Agency said on Friday. The IEA, which advises the world’s biggest economies on energy policy, said global oil demand was poised to climb to a five-year high this year thanks to lower prices. It steeply revised its outlook for demand for oil from the Organization of the Petroleum Exporting Countries. The report is one of the most bullish for OPEC since the group shocked markets last year by deciding against cutting production, choosing to fight for market share and depress the output of higher-cost producers such as the United States. "The big story this month is one of tightening supply, with the spotlight firmly fixed on non-OPEC," the IEA said in its monthly report. "Oil’s price […]
IEA Sees U.S. Shale Oil Output Shrinking in 2016 on Price Slump
U.S. shale oil production will drop 9 percent next year as a crude price below $50 a barrel “slams brakes” on years of supply growth, the International Energy Agency said. “Oil’s downward spiral to fresh six-year lows below $50 a barrel has dimmed the prospects for a recovery in U.S. drilling activity,” the Paris-based IEA said in its monthly market report Friday. “Unless oil prices bounce back in coming months, supply is forecast to fall by 385,000 barrels a day next year to 3.9 million barrels a day.” The forecast is a turnaround for the IEA, which only two months ago predicted U.S. shale oil output would increase by 60,000 barrels a day in 2016. Oil supply from producers outside OPEC will make the biggest contraction next year since 1992 as Saudi Arabia’s strategy to defend market share by pressuring rivals with lower prices takes effect, according to the […]
Oil Supply Outside OPEC to Fall Most Since 1992, IEA Forecasts
Oil supplies outside OPEC will decline next year by the most in more than two decades as the price rout curbs U.S. shale output, according to the International Energy Agency. Production outside the Organization of Petroleum Exporting Countries will fall by 500,000 barrels a day to 57.7 million in 2016, the Paris-based adviser said Friday in its monthly report. While fuel demand this year will be the strongest since 2010, record-high oil inventories in developed nations won’t start to diminish until the second half of next year, and the revival of Iranian exports with the removal of sanctions may swell supplies further, it said. Shrinking supplies outside OPEC show that Saudi Arabia’s strategy to defend the group’s market share by pressuring rivals with lower prices “appears to be having the intended effect,” the IEA said. Brent crude futures, a benchmark used around the world, slumped to a six-year low […]
Non-Opec production faces biggest decline in more than 20 years
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US oil producers thirsty for cash eye wastewater unit spin-offs
Some U.S. oil producers are trying to sell parts of their lucrative saltwater disposal businesses in a sign that cheap crude is already forcing cash-starved companies to sell assets so oil can keep flowing. Many oil companies rely on outside contractors, which tend to be small, privately-held companies, to inject the briny byproduct of crude production hundreds or thousands feet deep into the earth, well below the water table. But for producers which own such facilities, the high-margin business has served as a source of cost savings and steady revenue, factors that also make them appealing to yield-seeking investors in master limited partnerships (MLPs) and private equity funds. SandRidge Energy Inc and Oasis Petroleum Inc are two publicly traded oil producers openly marketing their saltwater divisions. SandRidge is planning to raise cash by listing it as an MLP and Oasis is seeking at least a partial sale. "The psychology […]
Russia: Global Shale Output Decline Will Stabilize Oil Market
MOSCOW, Sept 10 (Reuters) – Russia’s energy minister expects that cuts in global shale oil production, which has been hard hit by lower oil prices, will help stabilize the fragile oil market. Alexander Novak also reaffirmed that Russia, one of the world’s top oil producers, would not cut its own production as it would lead only to a short-term recovery with risks of subsequent slumps in prices. The Organization of the Petroleum Exporting Countries, which accounts for around a third of global oil output, changed its policy in 2014 to defend market share and discourage competing supply sources, rather than cut its own output in the face of lower prices. "Shale oil has been leaving the market bit by bit. This is a good and positive signal, which allows one to say that the market will stabilize in mid-term," Novak told Rossiya-24 TV in an interview aired on Thursday. […]
China’s crude imports are robust, details are not: Russell
A container box is loaded on to a truck at a port in Rizhao, Shandong province, August 12, 2015. If you were looking for a bright spot in China’s dismal trade numbers for August, your eyes may be tempted to focus on crude oil imports. A total of 26.59 million tonnes, equivalent to 6.26 million barrels per day (bpd) were imported, according to customs data. While this was a 13.4-percent drop from July’s 30.71 million tonnes, it’s worth bearing in mind that July was the record high in terms of tonnes and some pullback was always likely. August’s imports were up 5.6 percent from the same month last year. What’s more important is that crude imports are up 9.8 percent in the first eight months of the year compared to the same period in 2014, at 220.67 million tonnes, or about 6.63 million bpd. A gain of almost 10 […]
U.S. Oil Production to Fall, EIA Says
Government forecasters on Wednesday said U.S. oil production fell to a nearly one-year low and that low crude prices are likely to keep U.S. production falling through 2016. The U.S. Energy Information Administration, in its monthly short-term energy outlook, said that production fell by 140,000 barrels a day in August from the prior month. Production averaged 9.6 million barrels a day at its peak in April, the highest level since 1971, and has steadily declined since then to 9.1 million, the lowest since September. Oil traders have been closely focused on U.S. production in recent months, after a global glut of crude oil sent prices plunging in 2014. With the Organization of the Petroleum Exporting Countries producing above its target of 30 million barrels a day, investors say U.S. production needs to fall to make the market less oversupplied. The agency has pushed back its expectations for a U.S. […]