Recent Articles

Brent Oil Set for Longest Run of Weekly Losses Since ’02

Filed in Prices by on 31 October 2014

Brent crude headed for a sixth weekly loss, the longest decline since 2002, as OPEC boosted production to a 14-month high amid a global surplus. West Texas Intermediate was on track for its biggest monthly decline in more than two years. Futures fell as much as 1.3 percent in London, bringing October’s drop to about 9.9 percent. Both Brent and WTI are headed for their biggest monthly declines since 2012. Output from the 12-member Organization of Petroleum Exporting Countries increased by 53,000 barrels a day to 30.974 million, a third monthly gain, a Bloomberg survey showed. Traders are split on whether Saudi Arabia will deepen the crude price cuts that propelled oil into a bear market this month. “In the very short-term there’s still downside risk if no one says they’re going to cut production,” Hans van Cleef, energy economist at ABN Amro Bank NV in Amsterdam, said by [...]

WTI, Brent search for traction

Filed in Prices by on 31 October 2014

Secretary General of OPEC Abdalla El Badri signals to oil markets there’s nothing to worry about. UPI/Maryam Rahmanian Major stock indices struggled to find a consensus in Thursday trading after the U.S. Federal Reserve announced an end to the stimulus program known as quantitative easing. The Nikkei 225 Index was up 0.67 percent while the DAX index in Europe posted a drop of 0.92 percent. West Texas Intermediate crude oil prices for December delivery drifted off its Wednesday mark to trade down 0.62 to $81.58 in early Thursday trading. WTI, the U.S. benchmark, has been drifting toward the $80 mark because of supply and demand dynamics in the U.S. market. The U.S. Energy Information Administration said in its weekly report crude oil production for the week ending Oct. 24 averaged 8.97 million barrels per day, an increase of about one half of one percent from the previous week and [...]

Crude Falls on Federal Reserve Stimulus Halt, U.S. Supply

Filed in Prices by on 31 October 2014

West Texas Intermediate oil fell after the Federal Reserve ended its asset-purchase program and U.S. crude production surged to the highest level since the 1980s. Brent declined in London . Futures slipped 1.3 percent in New York . The dollar strengthened a second day against the euro after the Fed’s announcement, curbing the appeal of commodities priced in the U.S. currency as a store of value. U.S. crude supplies rose for a fourth week as output increased to 8.97 million barrels a day, Energy Information Administration data showed yesterday. “Yesterday’s Fed announcement is pushing the dollar higher, which is putting selling pressure on commodities,” Gene McGillian , an analyst and broker at Tradition Energy in Stamford , Connecticut , said by phone. “The supply build yesterday may have been smaller than expected but it was still quite large. Ample supply and economic worry are going to continue to weigh [...]

Natural Gas Holds Gains as Inventories Meet Expectations

Filed in Prices by on 31 October 2014

Natural gas prices held gains Thursday as weekly inventory data came in largely in line with estimates, and forecasts for cold weather prompted expectations for gas-fired heating demand. Natural gas for December delivery was up 2.8 cents, or 0.8%, at $3.8160 a million British thermal units on the New York Mercantile Exchange. The U.S. Energy Information Administration said domestic gas stockpiles rose 87 billion cubic feet in the week ended Oct. 24, slightly higher than the 85 bcf increase projected by a Wall Street Journal survey of analysts. Total inventories now stand at 3.48 trillion cubic feet, just shy of the 3.5 tcf mark that analysts say will ensure adequate supplies through the fall and winter heating season. With analysts expecting continued storage increases into November, stockpiles could cross that threshold as early as next week. Inventories now stand 8.2% below average levels [...]

Oil Export Study Finds Global Benchmark Key for U.S. Gas Prices

Filed in Prices by on 31 October 2014

U.S. energy officials released a study Thursday concluding the global Brent oil benchmark is more important in determining U.S. gasoline prices than the domestic benchmark, in the government’s first findings designed to inform the debate over lifting the decades-old ban on U.S. oil exports.  The report from the U.S. Energy Information Administration was the first in a series of studies to be released on the issue of relaxing U.S. export restrictions, and it stopped short of making any policy findings or recommendations. Still, the initial findings that domestic gasoline prices are derived from the global market could lay the groundwork for an eventual effort to end the export ban, on the basis that adding additional supplies to the world market through exports could lead to lower prices at the pump.

No Guarantee Saudis to Repeat Price Cut That Drove Oil Lower

Filed in Saudi Arabia by on 31 October 2014

Asian traders are split on whether Saudi Arabia will deepen the crude price cuts that propelled oil into a bear market this month. State-run Saudi Arabian Oil Co. will announce official selling prices for supplies to buyers in Asia for December next week after cutting prices to the lowest in almost six years for a month earlier. The world’s biggest oil exporter will further discount supplies, according to seven respondents in a Bloomberg survey of traders. Six people forecast prices to be unchanged and two predict an increase. Saudi Arabia’s decision may signal whether the biggest producers in the Organization of Petroleum Exporting Countries will offer bigger discounts to defend market share as the highest U.S. output in three decades boosts global supplies. After the most recent price cut on Oct. 1, Brent crude tumbled 9 percent and West Texas Intermediate slumped 11 percent amid speculation that OPEC won’t [...]

Oil-Price Drop Has Saudi Officials Divided

Filed in Saudi Arabia by on 31 October 2014

While international oil prices have plunged this month, Saudi Arabia’s normally talkative oil minister Ali al-Naimi has been on vacation.  Mr. al-Naimi’s absence from the fray—people familiar with his agenda say he was on vacation from the end of September and only returned to his office in recent days—is one symptom of the unusually high level of dissent within the secretive kingdom that has left it uncertain over how to respond to oil’s downturn.  During past sharp oil price moves, traders watched for statements from high-level Saudi officials that might calm the markets—Saudi Arabia is by far the biggest oil producer within the Organization of the Petroleum Exporting Countries, pumping some 10 million barrels of crude a day. The 79-year-old Mr. al-Naimi, oil minister since 1995, is usually the kingdom’s key spokesman.

OPEC Oil Output Rises in October as Prices Tumble: Survey

Filed in Oil Supply by on 31 October 2014

OPEC crude production rose to a 14-month high in October as oil futures sank into a bear market , a Bloomberg survey showed. Production by the 12-member Organization of Petroleum Exporting Countries climbed by 53,000 barrels a day to 30.974 million, led by gains in Iraq , Saudi Arabia and Libya , according to the survey of oil companies , producers and analysts. Last month’s total was revised 14,000 barrels a day lower to 30.921 million because of changes to the Iraqi, Kuwaiti, Nigerian and Qatari estimates. Output rose as Brent crude dropped to a four-year low amid ample global supplies and signs that demand will be sluggish through the end of the year. OPEC’s biggest producers, Saudi Arabia, Iraq, Iran and Kuwait , have cut their official selling prices, sparking speculation they will compete for market share rather than trim output. Ministers will gather next month to discuss [...]

China province orders 30 pct of vehicles off roads for APEC

Filed in China by on 31 October 2014

Five cities in north China’s Hebei Province, which surround Beijing, will ban 30 percent of vehicles from roads to help ensure cleaner air for the upcoming APEC meeting in the Chinese capital. The 10-day restriction that starts on Nov. 3 applies to the cities of Langfang, Baoding, Tangshan, Zhangjiakou and Chengde, which are all within 200 kilometers of Beijing, the Hebei provincial public security bureau said Friday. Meanwhile, high-emission vehicles are banned from driving on highways and city roads during the period. Local traffic police will order trucks, tricycles, motorcycles, tractors and high-emission passenger cars coming from Hebei and other provinces planning to pass through Beijing to return or make a detour. Beijing will also restrict cars based on an odd-and-even-number rule, allowing cars to drive on alternating days from Nov. 3 to 12. Apart from vehicle controls, the Chinese government has also ordered [...]

ConocoPhillips Becomes First to Cut Spending on Lower Oil

Filed in Prices, USA by on 31 October 2014

ConocoPhillips became the first major oil company to announce plans to reduce spending due to falling crude prices as drilling in some emerging North American fields becomes less profitable. The third-largest U.S. energy producer can meet its target to boost production by as much as 5 percent each year even as it reduces annual spending to below $16 billion, Chairman and Chief Executive Officer Ryan Lance told investors today. ConocoPhillips plans to scale back drilling in emerging oil regions such as West Texas and the Rocky Mountains . The company’s ability to produce oil at lower costs in more established areas that have fueled the U.S. shale boom make growth sustainable. ConocoPhillips (COP) could also reduce exploration spending, he said. “Events like the recent price downturn underscore the importance of staying focused on the fundamentals,” Lance said. “We know this is a cyclical business, and we’ve been here before.” [...]

Gasoline Price Study to Fuel Debate on U.S. Oil Exports

Filed in Prices, USA by on 31 October 2014

The push to end a four-decade limit on exporting U.S. oil may get a boost from a government study set for release as soon as today that will explain the relationship between crude oil and domestic gasoline prices. Supporters of lifting the ban anticipate the Energy Information Administration analysis will affirm what they suspect: that overseas sales won’t raise the price Americans pay at the pump because the price of gasoline is tied to the global oil supply. While some recent studies have reached a similar conclusion, the analysis from the non-partisan EIA could make a stronger impression with lawmakers. “We don’t have to prove gas prices are going to go down,” Robert Dillon, a spokesman for Senator Lisa Murkowski , an Alaska Republican, said in an interview. “We just have to prove they aren’t going to go up.” The EIA analysis is being released at a crucial time. [...]

TransCanada: Energy East pipeline application submitted

Filed in Canada by on 31 October 2014

TransCanada submits application to Canadian regulators for Energy East oil pipeline. (UPI/Shutterstock/tcly) Pipeline planner TransCanada Corp. said Thursday it filed a formal application for its Energy East pipeline project for eastern Canadian oil refineries. The Energy East oil pipeline involves the construction of a new 930-mile segment and converting 1,800 miles of gas line for oil service. It’s designed to carry 1.1 million barrels of oil per day from Alberta and Saskatchewan to eastern Canadian refineries. “Energy East will also eliminate the need for Eastern Canada to import most of the 700,000 barrels it consumes every day,” Russ Girling, TransCanada’s president and chief executive officer, said in a statement. TransCanada said Energy East would make eastern Canadian refineries more competitive because they’d be sourced by domestic crude and bring in more than $7 billion in tax revenues during its first 20 years of operation. Critics of the project said [...]

Texas oil production tops 2.2 million bpd

Filed in Shale Oil by on 31 October 2014

Texas regulator says oil production up more than 20 percent year-on-year. UPI/Gary C. Caskey Crude oil production for Texas was up more than 20 percent year-on-year to just over 2.2 million barrels per day, a state regulator said. The Texas Railroad Commission released preliminary figures for August, saying Wednesday production of 2.23 million bpd was up 24 percent from August 2013. Total monthly production in August was 69.2 million barrels, up from the 55.6 million produced during August 2013. Texas is the No. 1 oil producer in the United States. Texas hosts part of the Permian shale basin , which the U.S. Energy Department said is the most prolific with average production of around 1.3 million bpd. The Texas Railroad Commission adopted new shale rules , effective Nov. 17, meant to address disposal well operations in areas that may be prone to seismic activity. Hydraulic fracturing operations have been [...]

U.S. average gas price headed below $3

Filed in Prices by on 31 October 2014

This week, the national average for a gallon of regular might hit $3, a low that hasn’t been reached since 2010. UPI/John Angelillo Motor club AAA reports a national average price Thursday of $3.01, 32 cents less than one month ago. Lower crude oil prices and seasonal demand issues are in part responsible for the declining price at the pump. The department’s Energy Information Administration said its sentiment was consistent with price watchers like AAA, which are showing the average statewide price moving below the $3 mark for more than half of all U.S. states. “Current market prices and conditions indicate that a U.S. average retail price below the symbolic $3 per gallon mark is possible in the coming weeks,” EIA said in a [...]

Two New Bakken Crude Oil Pipelines Online by 2016

Filed in Pipeline by on 31 October 2014

Dallas, TX-based Energy Transfer Partners announced a joint venture with Houston-based Phillips 66 at the end of October, 2014, to build two pipelines that will move crude oil out of North Dakota’s Bakken Shale field. Energy Transfer Partners will have a 75% interest in the pipelines. Phillips 66 will have a 25% interest, and will pay a proportionate cost of the construction. Both the “Dakota Access Pipeline” and “Energy Transfer Crude Oil Pipeline” are scheduled to be completed by the end of 2016. “We look forward to working with Phillips 66 to build this much-needed pipeline infrastructure to link rapidly growing supplies of domestically produced light crude oil in the Bakken and Three Forks play to refineries throughout the country,” said Energy Transfer Partners CEO Kelcy Warren. According to Energy Transfer Partners, the Dakota Access Pipeline is expected to deliver in excess of 450,000 b/d of crude [...]

US shakes off torpor with 3.5% growth

Filed in Economy, USA by on 31 October 2014

US real GDP growth The US economy expanded at an annualised rate of 3.5 per cent in the third quarter of 2014, ending years of mediocre domestic growth and shaking off the more recent weakness in other major global economies. The figure came in well ahead of analysts’ expectations of 3 per cent growth – supporting the US Federal Reserve’s decision to end its third round of quantitative easing on Wednesday. But the details portray an economy that is steady, not accelerating. They suggest the US economy is ploughing forward, despite drag from the eurozone and emerging markets, but not rapidly enough to become the engine of global growth. “The growth in household consumption was disappointing, and business investment grew only moderately,” said Gad Levanon at the business organisation the Conference Board. “We expect the US economy to grow at about a 2.5 per cent rate on average in [...]

In the path of the pipeline

Filed in Pipeline by on 31 October 2014

The only sign of the six-year fight over the 400 acres of land that belong to Shannon and Kevin Graves is a wooden stick on the edge of a cornfield across from their modest home, located down a dirt road about an hour west of Lincoln. The stick marks where a section of the Keystone XL pipeline may one day be laid. Each day, as their nephew Daniel tends their cornfields, Kevin and Shannon Graves drive about 15 minutes away to their store, Tradition Hardware, located in the one-street town of Polk. Over the years, that daily drive past the stick has morphed into a reminder that, even as the battle over the Keystone XL has ignited a renewed environmental movement that sways state, national and international politics, at the end of the day, the pipeline fight is a local one. “It’s not a political issue [...]

Report for API quantifies new technologies’ 2013 US economic benefits

Filed in Prices by on 31 October 2014

Innovations in hydraulic fracturing and horizontal drilling that have driven the energy renaissance in the US were responsible for about 48% of the nation’s crude oil production and shaved as much as 94¢/gal off of fuel prices in 2013, according to a recent report commissioned by the American Petroleum Institute. “For the first time in generations, surging domestic production is driving our energy security and creating large benefits for consumers,” said Kyle Isakower, API vice-president, regulatory and economic policy. “Over the last 5 years, nearly every barrel of new US production can be attributed to the use of horizontal drilling and hydraulic fracturing technologies, and that production is reshaping global markets in a way that is strengthening the US both economically and diplomatically,” Isakower told reporters during an Oct. 30 teleconference. The study, by ICF International , compared [...]

Conoco 3Q Profit Rise, 2015 Capex Seen Lower

Filed in USA by on 31 October 2014

ConocoPhillips, the largest U.S. independent oil and gas company, on Thursday reported higher third-quarter profit after the sale of its Nigerian unit and said overall spending would decline next year, partly in response to falling crude oil prices. Crude oil prices have tumbled more than 20 percent in recent weeks as global demand slows and supplies rise. Crude traded in New York fell to a more than two-year low on Monday at $79.44 a barrel but recovered a bit to above $81 on Thursday. Conoco expects to spend less than $16 billion next year, down from the $16.7 billion projected for 2014, Ryan Lance, the chief executive officer, told investors on a conference call to discuss earnings. Over the last several years, Conoco has shed lower-margin assets, directing more capital to projects like shale drilling in Eagle Ford area in south Texas and the Bakken [...]

Oil Rout Seen Diluting Price Appeal of U.S. LNG Exports

Filed in Prices by on 31 October 2014

Oil’s collapse is eroding the appeal of potential U.S. LNG exports to Asia as it cuts the cost of competing supplies linked to the price of crude. Brent’s 22 percent drop this year outpaced the 8.9 percent decline in natural gas at Henry Hub, the benchmark for U.S. liquefied natural gas shipments that are scheduled to begin in 2015. When the cost of processing and shipping American supplies to Asia is taken into account, the price advantage over oil-linked cargoes from producers such as Qatar has more than halved, according to data compiled by Bloomberg. While the U.S. shale boom prompts the world’s biggest natural gas producer to plan exports of the fuel, it’s also boosting the country’s crude output to the most in 30 years, helping drive down global oil prices . “The U.S. will not sell cheap gas,” Umar Jehangir, the deputy secretary of development and joint [...]

Shale Boom Redraws Oil Routes as Alaskans Ship to Korea

Filed in exports, Shale Oil by on 31 October 2014

For signs of how the U.S. shale boom is transforming the global flow of oil, look halfway across the world at South Korea . The Asian nation, which relies on the Middle East for about 86 percent of its oil imports, is benefiting as new output from Texas to North Dakota displaces the crudes that fed U.S. refineries for decades. South Korea received this month a shipment of Alaskan oil for the first time in at least eight years and may buy more, the importing company said. The country was one of the first to receive a cargo of the ultralight U.S. oil known as condensate after export rules were eased. The U.S. shale revolution has driven oil output to the highest in more than three decades, reducing America’s need for overseas purchases and sinking global prices into a bear market . South Korea is seeking to reduce its [...]

AEO 2015 Preliminary Report

Filed in Oil Supply by on 31 October 2014

The EIA published, last month,  AEO2015 Preliminary Oil & Natural Gas Production & Price Results . And just below the title they wrote: DRAFT – DO NOT CITE But I am not citing anything, just informing you of what they said. What they mean however is that they reserve the right to change their mind before the report comes out early net year. And I can certainly understand that. All Oil data is in million barrels per day. They have lower 48 production hitting a slowly increasing plateau in 2016 and peaking at just under 8.4 million barrels per day in 2027. They have US Tight Oil production following pretty much the same profile, hitting a plateau in 2016 at about 5.5 million barrels per day and holding flat until starting a [...]

Russia: gas flow will resume after Ukraine pays

Filed in Ukraine by on 31 October 2014

AP Photo/Geert Vanden Wijngaert MOSCOW (AP) — Russia says gas supplies to Ukraine will resume after it pays off the first debt installment next week. Alexei Miller, the chief of Russia’s state-controlled Gazprom natural gas giant, made the statement Friday hours after Russia, Ukraine and the European Union thrashed out a $4.6 billion deal that will guarantee Russian gas supplies to Ukraine and further on to the EU. The deal eased fears that Europe will end up shivering this winter as occurred during a 2008 gas dispute when Ukraine siphoned gas intended for Europe and Russia turned off the taps in response. Moscow cut off gas supplies to Ukraine in June over unpaid debts, a move that followed the ouster of Ukraine’s Russia-friendly leader and the Kremlin’s annexation of Crimea.

Russia and Ukraine close to deal on gas for winter

Filed in Ukraine by on 31 October 2014

Russia and Ukraine are on the verge of an EU-brokered deal to end a months-long dispute over gas deliveries that would secure supplies to the war-torn country through the upcoming winter. Officials said after all-night talks that broke up at 4am Thursday morning, three separate texts were sent back to Kiev and Moscow – including a new bilateral treaty between the two countries and a commercial agreement between Russian gas monopoly Gazprom and its Ukrainian counterpart Naftogaz – for a final review before signatures are affixed. More On this topic German exports to Russia tumble Fast FT Rouble touches new record low UK blocks €5bn Russian North Sea deal No ‘untouchables’ for Putin, says Pugachev Podcast Russia-Ukraine tensions Neil Buckley, East Europe editor, on the challenges facing Ukraine’s new pro-European parliament EU officials said they believed the deal was all but completed after the most complicated issue – [...]

Shell Profit Increases as Refining Trumps Lower Oil Prices

Filed in Netherlands by on 31 October 2014

Royal Dutch Shell Plc (RDSA) said third-quarter profit rose 31 percent, beating estimates, as earnings from refining and natural gas countered the impact of lower crude prices at Europe’s biggest oil company. Profit excluding one-time items and inventory changes increased to $5.8 billion from $4.5 billion a year earlier, the Hague-based company said today in a statement. That beat the $5.48 billion average estimate of 16 analysts surveyed by Bloomberg. Sales fell 7 percent to $107.9 billion. Even as Shell’s oil production slumped and prices fell since June, a mix of better refining margins, lower spending and higher earnings from selling natural gas around the world bolstered profit. That contrasts with the company’s largest European competitors, BP Plc (BP/) and France ’s Total SA (FP) , which reported lower earnings this week. “Our results today show that we are delivering on three priorities I set out at the start [...]

Peak conventional oil adversely impacts the economy

Filed in Peak Oil by on 31 October 2014

4666 Votes By Drs. Robert & Sonia Vogl President and Vice President, Illinois Renewable Energy Association Our economy was built on cheap fossil fuels, which supported our economic and technological progress. As sources of conventional low-cost oil are depleted, we have turned to unconventional sources with higher extraction costs. With current oil prices around $80 to $85 per barrel, it has been estimated that new tar sands oil requires $95 per barrel to be extracted. If the oil is not extracted, prices could still rise, as competition for the existing oil would intensify. Energy economist Douglas Reynolds believes our economic malaise is a result of a decrease in energy supplies. He notes that the United States has a vast global military presence that we are unable to pay for, a decreasing standard of living, increased concentration of wealth, and a continuous energy crisis that began in 1973. He sees [...]

Dubious Assumptions Underpin Latest ‘Peak Oil’ Anti-Fracking Report

Filed in Peak Oil by on 31 October 2014

David Hughes, a Canadian geoscientist and a fellow of the anti-fracking Post Carbon Institute , has emerged as one of the media’s favorite proponents of “Peak Oil,” the debunked theory that oil production will soon be in permanent decline. Never mind, of course, that there are more proven oil reserves today than there were decades ago, when “Peak Oil” advocates were saying the exact same thing as they are today. In a new report , Hughes once again gives succor to anti-development and anti-fracking activists with more claims that shale development will “peak” a lot earlier than expected. More specifically, Hughes claims that “tight oil production from major plays will peak before 2020”. He also adds: “…by 2040, production rates from the Bakken and Eagle Ford will be less than a tenth of that projected by the EIA.” Hughes is arguing, in effect, that the hundreds of thousands of [...]

How Would We Provide Enough Energy For 11 Billion People?

Filed in Population by on 31 October 2014

Reconciling energy and environmental concerns was challenging enough when global population seemed headed for a plateau around 9 billion. A new forecast of up to 12 billion people by 2100 raises large questions about the capacity of current energy technologies to meet future global needs. The combination of forecasted global economic weakness and growing non-OPEC production continues to weigh on oil prices.  Brent crude has fallen below $90 per barrel , and the US benchmark has been flirting with $80. But just when the rapid growth of energy supplies has undermined the mood of energy scarcity that prevailed for the last four decades, a group of demographers has thrown us a curve ball , though admittedly a very long one. In the 1970s many people were concerned about a “population explosion.” Dystopian fiction–already a well-established sub-genre–featured visions of a grossly overcrowded future earth, along the lines of “ Soylent Green .” [...]

Oil Eases on Concerns Price Gains Likely Short-Lived

Filed in Prices by on 30 October 2014

 Crude-oil futures eased in Asian hours Thursday after posting overnight gains as markets absorbed the impact of the U.S. Federal Reserve’s monetary policy announcements. On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $81.87 a barrel at 0410 GMT, down $0.33 in the Globex electronic session. December Brent crude on London’s ICE Futures exchange fell $0.09 to $87.03 a barrel. Global oil prices settled higher for the second consecutive day Wednesday after weekly U.S. oil stockpiles didn’t rise as much as they were expected to, and petroleum product stockpiles shrunk, indicating stronger demand. But the price strength is likely to be short-lived due to the oversupply situation in oil markets, analyst Daniel Ang at Phillip Futures said. “We find new resistance [for Brent crude] at $88.81 but find it extremely difficult for prices to even stay at current levels,” [...]

WTI Oil Falls From 1-Week High as U.S. Supplies Expand

Filed in Prices by on 30 October 2014

West Texas Intermediate retreated from a one-week high after government data showed crude stockpiles rose as output surged to a record high in the U.S., the world’s biggest oil consumer. Brent slid in London. Futures fell as much as 0.6 percent in New York . Crude stockpiles gained for a fourth week as production increased to 8.97 million barrels a day, the fastest rate since January 1983, according to the Energy Information Administration. Supply and demand will return to equilibrium and OPEC members aren’t waging a price war, Secretary-General Abdalla El-Badri said yesterday. “Expanding stockpiles are putting downward pressure on oil,” Kang Yoo Jin, a commodities analyst at Woori Investment & Securities Co. in Seoul, said by phone today. “Oversupply concerns in the market are not easing because OPEC isn’t making any comments so far on a possible production cut.” WTI for December delivery dropped as much as 45 [...]

Iran’s Oil Revenue Falls 30% Because of Global Price Decline

Filed in Iran by on 30 October 2014

Print Back to story Iran ’s revenue from crude sales, the OPEC member’s biggest export, dropped 30 percent because of the recent decline in global oil prices, according to President Hassan Rouhani. “International conditions are such that the country’s main source of income, i.e. oil revenues, has been cut by some 30 percent,” Rouhani said in remarks to parliament published yesterday on Shana, the Oil Ministry’s news website. “We have to deal with the new conditions and the global economic conditions.” Brent crude, a benchmark for more than half of the world’s oil, has plunged more than 20 percent since peaking in June at about $115 a barrel as supply, boosted by U.S. shale production, outpaced demand. Iran needs to achieve a break-even sales price of $143 a barrel this year to maintain its fiscal balance, according to data compiled by Bloomberg. “The government probably will face a budget [...]

Non-oil exports grow for Iran

Filed in Iran by on 30 October 2014

Iranian government data show non-oil product exports earned Iran $27 billion during the first five months of a calendar year beginning March 21. Data show the Iranian economy exported petroleum products like butane and liquefied propane predominately to Afghanistan , China, India, Iraq and the United Arab Emirates. Sanctions imposed on the Iranian economy in response to a controversial nuclear program means oil exports are at about half of their 2.2 million barrel per day rate in 2012. Iran is allowed to export some oil under an international sanctions agreement reached in November, though the International Monetary Fund said the oil-dependent economy is still shrinking at a rate of 1.7 percent. Hamid Farnam, the energy commissioner in the Iranian Chamber of Commerce, told the Oil Ministry’s news website Shana last week the government should work to push [...]

As Abu Dhabi Sizes Up Oil Partners, Western Firms Risk Being Left Out

Filed in Abu Dhabi by on 30 October 2014

Abu Dhabi, the largest and wealthiest member among the seven states in the United Arab Emirates, is shaking up its oil industry . It has allowed the expiration of some longstanding concessions to major Western oil companies and is considering replacing at least some of them with partners from Asia and elsewhere. For more than seven decades, the Abu Dhabi National Oil Company, also known as Adnoc, shared the operation of Abu Dhabi’s oil fields, the biggest onshore producers in the United Arab Emirates, with companies including Exxon Mobil , Royal Dutch Shell, Total and BP , under the umbrella of the Abu Dhabi Company for Onshore Oil Operations. The concessions, for 75 years, expired in January, but Abu Dhabi has yet to say which of the Western companies will have their rights renewed. There are also likely to be new entrants, possibly including [...]

Nigeria’s N13.4 Trillion 2014 Oil Earning at Risk Over Price Decline

Filed in Nigeria by on 30 October 2014

 THE Federal Government is at risk of losing part of its 2014 crude oil earnings of over $84 billion (N13.4 trillion) to the continuous decline in the prices of crude oil. Nigeria realized about $40 billion (N6.4 trillion) from crude oil export between January and June 2014, having earned N13.4 trillion in 2013. According to the United State Energy Information Administration (EIA), This revenue positioned Nigeria as the fourth highest earner among oil producing countries, after Saudi Arabia ($274 billion), Kuwait ($45 billion), and Iraq ($45 billion), during the same period. Already, members of the Petroleum Exporting Countries (OPEC) had its revenue slashed in the first half of this year due to the decline in the price of crude oil during the period. As at Monday this week, the cost [...]

Nigerian Bank Debt Taps Turned Off by Oil-Price Slump

Filed in Nigeria by on 30 October 2014

Central bank rules to curb foreign-currency borrowing by Nigerian lenders threaten to halt Eurobond sales by banks in Africa ’s biggest oil producer as lower crude prices heighten risks to the naira. Banks will probably turn to rights offers and naira debt rather than selling dollar bonds, according to FBN Capital, the investment-banking unit of Nigeria ’s largest bank by assets, Lagos-based FBN Holdings Plc. (FBNH) Nigerian dollar notes lost 0.4 percent this month, compared with a 2.2 percent average return among 57 emerging markets tracked by Bloomberg indexes . Slumping oil prices are weighing on the outlook for Africa’s biggest economy, weakening the naira and eroding foreign-currency earnings. The central bank in a statement dated Oct. 24 capped the amount of borrowing banks can do in foreign currencies as percentages of shareholders’ funds. “The central bank rule will slow the issuance of dollar bonds,” Bunmi Asaolu, a banking [...]

PetroChina Profit Falls to Lowest in 8 Quarters on Crude

Filed in China by on 30 October 2014

Brent has lost a quarter of its value from its peak in June. That’s bad news for PetroChina Co. (857) and Cnooc Ltd. (883) , which made most of their profit this year from oil and gas production. The shares dropped in today’s trading. PetroChina, the nation’s biggest explorer, posted its lowest profit in eight quarters yesterday, while Cnooc Ltd., which only reports quarterly sales, saw a decline of 4.6 percent. The plunge in crude may cause PetroChina’s profit margin to shrink and lead Cnooc, the country’s biggest offshore oil and gas producer, to stop some high-cost projects. “The negative impact from lower crude prices hasn’t fully materialized yet as the prices in July and August were still OK,” said Laban Yu, a Hong Kong-based analyst at Jefferies Group LLC. “The fourth quarter will be really challenging for all upstream players if crude prices don’t quickly rebound toward $100.” [...]

PetroChina Earnings Fall 6.2% On Weaker Oil Demand

Filed in China by on 30 October 2014

State-controlled PetroChina Co. Wednesday posted a 6.2% decline in its third-quarter net profit on lower contribution from upstream businesses amid weaker oil demand. China’s largest oil company by production capacity said third-quarter net profit fell to 27.9 billion yuan from 29.8 billion yuan a year earlier. Revenue rose 3.2% to 600.6 billion yuan from a year earlier. The company’s crude oil output rose 0.3% in the first nine months. Write to Yvonne Lee at yvonne.lee@wsj.com

U.S. crude oil imports down 15 percent

Filed in Oil Supply, USA by on 30 October 2014

Total U.S. crude oil imports for the first nine months of the year are down 15 percent from two years ago, Energy Information Administration data show. EIA published monthly data for the U.S. energy sector. For the first nine months of 2014 , the United States imported an average 7.4 million barrels per day of crude oil, down from the 8.7 million bpd reported during the same period in 2012. In its latest weekly report , EIA said the country imported around 7.4 million barrels of oil for the week ending Oct. 10, down 7.4 percent from the same week in 2013. In his latest economic address to the nation , President Barack Obama said the country is producing more than it imports for the first time in nearly two decades. He [...]

Shale Boom Shines Light on Natural-Gas Liquids

Filed in Shale Oil by on 30 October 2014

An unsung byproduct of oil and natural-gas production is getting more attention from hedge funds and investors as they seek new ways to bet on the U.S. shale boom.  Natural-gas liquids, which include ethane, propane, butane, isobutane and natural gasoline, are separated out from crude oil and natural gas. They are known as the fuels in propane grills and butane lighters and as feedstocks to make plastics and chemicals. Until recently, they attracted little investor consideration.

5 Things to Know About Natural-Gas Liquids

Filed in Oil Supply by on 30 October 2014

Natural-gas liquids, which are produced alongside oil and natural gas, are a key byproduct of the U.S. shale boom . As supply and demand grow, so does trading activity and corporate investment in these products. Here are five things to know about natural-gas liquids. 1 There are five types Share on Twitter Natural-gas liquids, or NGLs, include propane, butane, isobutene, ethane and natural gasoline. (Natural gasoline is different from natural gas, which is not an NGL.) They are also called liquefied petroleum gases, or LPGs, although some say LPG is a narrower category that only includes propane and butane. The most common way to produce NGLs is to separate them out from natural gas in a processing plant. NGLs can also be produced in oil refineries alongside diesel and other fuels. 2 They are mostly used to make petrochemicals Share on Twitter Most of the NGLs produced [...]

Energy Boom Can Withstand Steeper Oil-Price Drop

Filed in Shale Oil by on 30 October 2014

Oil prices would need to fall at least another $20 a barrel to choke off the U.S. energy boom, industry experts say, though some smaller American producers would face serious problems from a more modest decline. Small and midsize companies—not global giants—are behind the surge in U.S. oil output, which hit 8.97 million barrels a day earlier this month, according to federal statistics. Some of these drillers have taken on a lot of debt, which was easier to justify when oil was going for as much as $107 a barrel just four months ago.

Effect of Increased Levels of Liquefied Natural Gas Exports on U.S. Energy Markets

Filed in exports by on 30 October 2014

 This updated study, like the prior one, is intended to serve as an input to be considered in the evaluation of applications to export LNG from the United States under Section 3 of the Natural Gas Act, which requires DOE to grant a permit to export domestically produced natural gas unless it finds that such action is not consistent with the public interest. Appendix A provides a copy of the DOE/FE request letter. DOE/FE asked EIA to assess how specified scenarios of increased exports of LNG from the Lower 48 states could affect domestic energy markets, focusing on consumption, production, and prices. The DOE/FE scenarios posit total LNG exports [...]

Oil industry says US EPA’s refinery emissions rule would cost $20 billion

Filed in Climate by on 30 October 2014

 The US Environmental Protection Agency’s proposed regulations on toxic air emissions from oil refineries would cost the industry $20 billion, according to trade groups representing oil producers and refiners. In comments filed with the EPA Tuesday, the American Petroleum Institute and and American Fuel and Petrochemical Manufacturers said the proposed rule would be too onerous and could actually lead to higher greenhouse-gas emissions. “EPA’s proposed regulations could drive up costs and roll back environmental progress, forcing refineries to increase emissions by installing hundreds of costly new flare systems at a time when industry has been working with EPA to reduce flaring,” API Director of Regulatory and Scientific Affairs Howard Feldman said in a statement. Tuesday was the deadline for public comments on the regulations. The proposed rule, which would update the EPA’s almost two-decades-old toxic emissions standards for refineries, would for the first time [...]

Texas RRC Issues New Regulations on Fracking Disposal Wells

Filed in Shale Oil by on 30 October 2014

New regulations covering disposal wells from fracking operations go into effect in Texas beginning in November 2014. The new regulations by the Texas Railroad Commission (Texas RRC, or Commission), the state’s regulating entity for oil and gas, are centered on the possible linkage between seismic activity and disposing wells. There are four main components of the new regulations: Applicants for disposal wells must conduct a search on the U.S. Geological Survey seismic database to determine if there is a history of earthquakes within a 100-square-mile area around the site of the proposed disposal well Clarify that the Commission will have the authority to suspend or terminate a disposal well permit if there is any indication from scientific data that seismic activity in the area could occur due to the disposal well Under the new regulations, disposal well operators will have to disclose annual reported volumes and pressures more frequently [...]

Bakken Production Surge Boosts Hess Quarterly Profit

Filed in Shale Oil by on 30 October 2014

Oil and gas producer Hess Corp posted a better-than-expected quarterly profit on Wednesday as production jumped and costs fell in North Dakota’s booming Bakken shale formation. The company, which also produces oil in Norway, Ohio and the U.S. Gulf of Mexico, said it was watching oil prices closely and may change its operations if prices fall further, though no decision has been made. The price of Brent crude has fallen about 21 percent in recent months, prompting concern that drilling could slow. Hess bases its budget on Brent prices around $100 per barrel, though the commodity traded at about $87 on Wednesday. If prices fall too low, oil companies tend to stop drilling new wells and slow existing production in an effort to cut costs. Hess didn’t announce any steps like that on Wednesday, but said it is watching the situation closely. “We are reviewing [...]

Volkswagen’s New 300 MPG Car Not Allowed In America Because It Is Too Efficient

Filed in Transportation by on 30 October 2014

You won’t find the 300 MPG Volkswagen XL1 in an American showroom, in fact it has even been denied a tour of America because it is too efficient for the American public to be made widely aware of, and oil profits are too high in America with the status quo in place. No tour has been allowed for this car because the myth that 50 mpg is virtually impossible to obtain from even a stripped down econobox is too profitable to let go of, and when it comes to corporate oil profits, ignorance is bliss. Years ago I had calculated that it should be possible to get a small car to exceed 100 mpg by putting parallel direct to cylinder water injectors side by side with the fuel injectors, and using the exhaust manifold to preheat the water so it would enter the cylinders as dry steam, [...]

The ‘Russification’ of Oil Exploration

Filed in Russia by on 30 October 2014

The American and European sanctions against the Russian oil industry have dashed, at least for now, the Western oil majors’ ambitions to drill in the Arctic Ocean. But drilling will continue all the same, Russian government and state oil company officials have been taking pains to point out, ever since the sanctions took effect over the summer. “We will do it on our own,” Igor I. Sechin, the president of Russia’s state-controlled oil company, Rosneft, told journalists in October. “We’ll continue drilling here next year and the years after that.” Rather than throw in the towel in the face of Western sanctions intended to halt Russia’s Arctic oil ambitions by stopping technology transfers, the Russians have responded with plans to “Russify” the technology to be deployed in the world’s largest effort to date to extract oil from the thawing Arctic Ocean. The solution to tapping the Arctic, [...]

Ukraine, Russia to Resume Gas Talks Thursday

Filed in Ukraine by on 30 October 2014

Ukraine and Russia are set to resume talks on Thursday to resolve their natural-gas dispute, after late-night negotiations yielded no breakthrough. Ukraine still needs to secure funding to pay upfront for Russian gas deliveries before a deal can be concluded, two people familiar with the situation said. Kiev still needs to raise enough money to pay $1.6 billion in advance for November and December deliveries, according to the terms of a deal agreed on Oct. 21. Talks broke up at around 4 a.m. local time without this issue being resolved, the people said. The talks under way in Brussels, the latest in a months-long series of high-level meetings, come amid fears of possible gas shortages in parts of Europe if the flow from Russia to Ukraine isn’t restored. “We have agreed to continue to work and continue the talks on October 30,” Russian Energy Minister, Alexander [...]

Rosneft defiant amid sanctions pressure

Filed in Russia by on 30 October 2014

Spokesman for Russian President Vladimir Putin denies report oil company Rosneft is preparing action to counter Western sanctions pressure. A Russian government spokesman said Wednesday there was no truth about clams oil company Rosneft was looking for protection against Western sanctions. State-controlled Rosneft said it would work to protect its reputation after a report in Russian business daily Kommersant said it sent proposals to President Vladimir Putin to restrict some of its operations in an effort to protect itself from sanctions. “This is completely untrue,” Kremlin spokesman Dmitry Peskov said. Rosneft said the claims were aimed at provoking more action from Western governments frustrated with the Kremlin’s stance on upheavals in post-Soviet Ukraine. The company threatened to file suit against Kommersant for their publication. Rosneft is the target of Western economic sanctions imposed in response to Russian policies in eastern Ukraine. Igor [...]

Shell hurt by oil price drop, names new chairman

Filed in Netherlands by on 30 October 2014

Shell, Europe’s largest oil company, reported Thursday a small fall in third quarter net profit against a backdrop of sliding oil prices, and named former DuPont Chief Executive Charles Holliday to become chairman of the board in 2015. Net profit was $4.46 billion, down 4.5 percent from $4.67 billion in the same period a year earlier. The 2014 figure includes a one-time $350 million provision for future tax liabilities in Australia. Royal Dutch Shell PLC said that when stripping out the impact of fluctuations in the price of oil, earnings rose 24 percent to $5.27 billion. That measure of earnings, called “current cost of supplies”, or CCS, is favored by the industry to gauge underlying profitability of operations. “The recent decline in oil prices is part of the volatility in our industry,” said Chief Executive Ben van Beurden in a statement. He said the company is [...]