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U.S. oil storage becomes big business: Kemp

Oil storage tanks are seen at sunrise with the Rocky Mountains and the Denver downtown skyline in the background October 14, 2014. Commercial crude stocks across the United States rose by 105 million barrels early this year to peak at 490 million barrels, the highest level in eight decades. Despite some draw downs in recent weeks, which have reduced inventories to 460 million barrels, stocks are still 92 million barrels higher than this time last year. And stocks could rise again at the end of the third quarter when U.S. refineries enter the traditional autumn turn around season. Yet the cost of storing crude has remained relatively modest throughout thanks to a big increase in tank farm and pipeline capacity added in recent years. Working storage capacity at refineries, tank farms and underground storage facilities in the United States has increased by 85 million barrels, almost 19 percent, since […]

Posted On : Published By : Tom Whipple
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Shell to ax 6,500 jobs, cut spending to cope with lower oil prices

Shell’s company logo is pictured at a gas station in Zurich April 8, 2015. Royal Dutch Shell ( RDSa.L ) is to ax 6,500 jobs this year and step up spending cuts to deal with an extended period of lower oil prices which contributed to a 37 percent drop in the oil and gas group’s second-quarter profits. The Anglo-Dutch company also said it was planning more asset disposals as it pushes ahead with its proposed $70 billion acquisition of BG Group ( BG.L ), bringing total asset sales between 2014 and 2018 to $50 billion. "We have to be resilient in a world where oil prices remain low for some time, whilst keeping an eye on recovery," Chief Executive Officer Ben van Beurden said. Shell said it anticipated 6,500 staff and direct contractor reductions in 2015 from a total of nearly 100,000 employees. And the group said it would […]

Posted On : Published By : Tom Whipple
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Mixed Signals on U.S. Oil Output

The most important question in the oil market is whether American production is falling as prices drop. Official oil data aren’t giving a straight answer. Investors, traders and executives who rely on federal data from the Energy Information Administration are tripping over conflicting images of U.S. production that have emerged from separate EIA reports in recent months. At stake are billions of dollars of wagers on the direction of oil prices as well as potential long-term investments by energy companies. Oil prices have swooned by more than 50% over the past year, due largely to a boom in production from U.S. shale-oil fields. Many analysts say prices will only stabilize after less-economical production is squeezed out, spurring a sustained decline in output. Weekly oil-output estimates from the EIA started to show falling production in April. Separate EIA reports on shale-oil drilling have forecast production declines for months. But the […]

Posted On : Published By : Tom Whipple
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Whiting cuts budget less than two weeks after raising it

A trader waits for the opening of Whiting Petroleum’s stock at the post where it is traded on the floor of the New York Stock Exchange March 24, 2015. Whiting Petroleum Corp cut its 2015 budget on Wednesday less than two weeks after raising it, a turnaround that underscores the uncertainty engulfing the energy industry while crude prices sit roughly 50 percent below last year’s levels. The company, North Dakota’s largest oil producer, tends to be seen as a key barometer of the health of the U.S. shale industry. Its spending trepidation is sure to have ripple effects on drilling contractors and other oilfield service providers. Whiting now plans to spend $2.15 billion this year, running eight drilling rigs instead of a previous plan for 11, and mulling small divestments to bolster the company’s balance sheet. Just 12 days ago the company had boosted its budget by 15 percent […]

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Suncor Deepens Spending Cuts for 2015 as Oil Price Languishes

Suncor Energy Inc., Canada’s largest oil producer, cut its spending plan for 2015 for a second time and eliminated some non-essential projects as part of cost-reduction efforts. The company now plans to spend between C$5.8 billion ($4.5 billion) and C$6.4 billion from an earlier range of C$6.2 billion and C$6.8 billion, Calgary-based Suncor said Wednesday Canadian time in a statement on Marketwired. Suncor has already cut about 1,000 jobs and previously lowered its 2015 capital budget by C$1 billion while delaying projects to weather collapsing prices. Still, it’s pressing ahead with the C$13 billion Fort Hills oil-sands mine. The move to cut spending comes after the price of West Texas Intermediate moved back into a bear market, dropping below $50 a barrel earlier this month for the first time in about a quarter. The U.S. benchmark, averaged about $58 in the second quarter compared with about $103 in the […]

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Chevron and Exxon Get the Plaudits, but Some Smaller Drillers Faring Well

Giant oil companies are weathering the oil slump better than the average shale driller, but even their famous stability is at times being surpassed by much smaller companies that own some of the choicest U.S. oil-and-gas fields. Take Cimarex Energy Co. XEC 3.33 % , which drills in Texas and Oklahoma. The oil producer’s stock price has fared better than that of Chevron Corp. CVX 0.92 % , the second largest American oil company by revenue, since crude-oil prices started crashing last June. Shares of Diamondback Energy Inc., FANG 4.09 % an eight-year-old oil producer with a $4.3 billion market value, have held up almost as well as Exxon Mobil Corp. XOM 0.80 % ’s over that stretch. And as of this week, Cabot Oil & Gas Corp. COG -1.49 % , a Houston-based shale-gas specialist, had bested all the big oil companies in stock-market performance since last summer […]

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Higher-risk ‘Shallow Fracking’ More Common than Suspected: Study

Sign image via shutterstock. Reproduced at Resilience.org with permission> The fracking of oil and gas less than a mile from aquifers or the Earth’s surface now takes place across North America with few restrictions, posing increased risk for drinking water supplies, says a new Stanford study . The study examined the frequency of so-called shallow fracking, described by the researchers as occurring less than a mile underground. Shallow fracking poses a greater risk to drinking water than fracking that occurs much deeper under the Earth’s surface. Out of 44,000 wells fracked between 2010 and 2013 in the United States, researchers found that 6,900 (16 per cent) were fractured less than a mile from the surface and another 2,600 wells (six per cent) were fractured above 3,000 feet, or 900 metres. "What surprised me is how often shallow fracturing occurs with large volumes of chemicals and water," said lead researcher […]

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US, East Coast ULSD stocks set record highs: EIA data

US ULSD stocks rose to a record high for the fourth straight week, as East Coast stocks also hit a record for the fifth straight week, according to Energy Information Administration data released Wednesday. Total US stocks of ULSD rose about 2 million barrels in the week that ended Friday to 123.91 million barrels, the highest level since EIA began collecting the data in 2004. US stocks have risen to a record each of the last four weeks, with most of the stock builds concentrated in the East Coast. East Coast stocks of ULSD rose 2.32 million barrels to 41.02 million barrels, the highest ever. Stock builds in the East Coast also have set records in each of the last five weeks. Article continues below… Platts Global Alert is a complete real-time information service for the global energy industry, providing breaking reports of deals done, price indicators for crude […]

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Texas oil production up year-on-year

Texas crude oil production posts second straight month of gains year-on-year, state regulator says. Photo by ekina/Shutterstock AUSTIN, Texas, July 29 (UPI) — A Texas energy regulator said preliminary estimates show crude oil production in the state increased just over 13 percent in May year-on-year. The Railroad Commission of Texas published data for May 2015 , saying total crude oil production for the month averaged 2.4 million barrels per day, up from the 2.1 million bpd reported for May 2014. May data show the second straight month for gains for the No. 1 oil producer in the nation. April crude oil production of 2.31 million bpd was a 13 percent increase year-on-year. Decreases were posted, however, in early 2015. The momentum comes despite the steep decline in crude oil prices. The weak market leaves energy companies with less capital to invest in exploration and production, a trend reflected in […]

Posted On : Published By : Tom Whipple
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U.S. oil firms turn to fracking mixology as crude slides again

Halliburton SandCastle PS-2500 trailers, which store sand for hydraulic fracturing, also known as fracking, stand at a Hess well site near Williston, North Dakota November 12, 2014. U.S. oil companies, under renewed pressure from falling crude prices, are increasingly tweaking and mixing fracking technologies as they scramble to squeeze more out of wells and eke out profits after rounds of cost-cutting. Shale oil firms need the experiments to payoff now more so than before given that oil prices have resumed their slide to trade around $49 per barrel this week from $60 a few months ago. Quarterly earnings – and the reams of data that accompany them – throughout the next few weeks will offer Wall Street the first opportunity to assess those efforts and pick potential winners and losers. When oil fetched $100 a barrel and profits were fatter, most companies followed a similar script. Now, many try […]

Posted On : Published By : Tom Whipple