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Oil Prices Post Fifth Weekly Loss

Filed in Prices by on 25 October 2014

Global oil futures posted a fifth weekly loss as concerns about high global supply continued to weigh on prices.  Prices have tumbled for months as supply growth has outpaced demand. Market participants are waiting to see whether the Organization of the Petroleum Exporting Countries, and specifically Saudi Arabia, will cut production to raise prices. OPEC’s next meeting is Nov. 27.  “The Saudis certainly have more tolerance for sustained lower prices,” said Ed Kevelson, head of U.S. over-the-counter energy at brokerage Newedge U.S.A., which is owned by Société Générale. “The larger issue is, clearly, that people feel the Saudis are not going to go it alone.”

Brent, WTI unable to hold rally

Filed in Prices by on 25 October 2014

Oil prices unable to hold on to rally, with both major indices falling in Friday trading. (File/UPI/John Angelillo) Brent crude oil prices rallied Thursday nearly 3 percent on word producer Saudi Arabia was trimming output. The price for December delivery in early Friday trading was down around $1 per barrel from the previous session’s high of $86.75. Contracts beyond December show Brent prices moving closer to the $90 per barrel mark. Prices had contracted in response to supply and demand dynamics. Brent prices rallied in recent trading on word China was experiencing quality growth. Most major Asian stock indices reported down days Friday, though only modestly with the Shanghai Composite off 0.01 percent. West Texas Intermediate continued its trend toward $80 per barrel in early Friday trading, down more than $1 per barrel to trade at $80.89 for the December contract. WTI had followed the Brent rally Thursday, though [...]

Crude Gives Back Gains; Saudi Oil Policy Seen Unchanged

Filed in Prices by on 25 October 2014

West Texas Intermediate retreated from the biggest gain since September amid speculation a drop in Saudi Arabian oil supply to the market isn’t a signal for production cuts. Brent widened its premium to WTI. Futures capped a fourth weekly decline. Saudi Arabia ’s crude supplies slipped last month even as production increased, a person familiar with the kingdom’s oil policy said yesterday. Both Brent and WTI have dropped more than 20 percent from this year’s high in June on concern global supply is outpacing demand. “The Saudis are not cutting production,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “They can tolerate low prices. We have plenty of supply and the trend for oil is to go lower.” WTI for December delivery dropped $1.08, or 1.3 percent, to end at $81.01 a barrel on the New York Mercantile Exchange . [...]

Natural Gas Rallies on Signs of Chill and Bargain Buying

Filed in Prices by on 25 October 2014

Natural gas prices rebounded Friday, flipping from morning losses into small gains on slight signs of cool weather and an influx of bargain buyers, analysts said. The front-month November contract settled up 0.1 cent, or 0.03%, to $3.623 a million British thermal units on the New York Mercantile Exchange. Prices had hit a new intraday low for 2014, dipping to $3.558/mmBtu before a steady rally started after 11 a.m. Updated weather forecasts show a slight chill possible for the start of November, analysts said. That could drive heating demand at a time when traders had expected temperatures to be comfortable. But the change was only slight, and the new low prices may have played an even larger role in the move, said Aaron Calder, senior market analyst at energy-consulting firm Gelber & Associates in Houston. The $3.50/mmBtu mark is key in the natural gas market [...]

Islamists kill 31 Egyptian soldiers in Sinai

Filed in Egypt by on 25 October 2014

Islamist militants killed 31 Egyptian soldiers on Friday in two separate attacks in the northern Sinai Peninsula, the deadliest day in months in the volatile desert region. President Abdel Fattah al-Sisi summoned ministers and officials to an emergency meeting of his National Defence Council after the attacks. Egypt ’s armed forces were reportedly preparing for reprisals in response to the attacks. More On this topic Investors eye Egypt energy opportunities US seeks Egypt’s help to counter Isis Blast in central Cairo kills at least two Egypt swelters in nationwide power cut IN Middle Eastern Politics & Society Tunisia police kill six ahead of poll Tunisia poll takes place amid disillusionment Houthi expansion threatens Yemeni strait Turkey allows Kurds to relieve Kobani The first, a massive car bomb explosion at a checkpoint protected by armoured vehicles northwest of the town of Arish, killed 28 soldiers. The second, a drive-by shooting [...]

Mexico’s Pemex 3Q Loss Widens On Lower Crude Output, Prices

Filed in Mexico by on 25 October 2014

Mexico’s state-owned oil company Pemex reported a sharply deeper third quarter loss on falling crude output and prices, the company said on Friday in a filing with the Mexican stock exchange. Pemex said its quarterly loss totaled 59.65 billion pesos ($4.44 billion) during the July to September period, compared with a year earlier loss of 39.14 billion pesos ($2.98 billion). The company reported third-quarter revenues of 406.5 billion pesos for the quarter, down 0.7 percent compared with same period last year. Higher interest payments and foreign exchange losses also weighed. Pemex’s crude oil production was down 4.3 percent during the quarter to 2.398 million barrels per day (bpd), compared with 2.506 million bpd during the third quarter of 2013. Meanwhile, the average price of Pemex’s crude exports fell 8.4 percent to $92.08 per barrel, compared with $100.53 per barrel during the same period [...]

Berkshire’s BNSF to Add Surcharge on Older Oil Tank Cars

Filed in Railroads by on 25 October 2014

BNSF Railway Co. plans to apply a $1,000 surcharge for each older tank car that hauls oil, as the railroad owned by Warren Buffett ’s Berkshire Hathaway Inc. encourages shippers to scrap the puncture-prone cars. The charge, which will take effect Jan. 1, will add about $1.50 a barrel to the cost of shipping oil across the country. It’s the first one announced by a major U.S. railroad for older cars known as DOT-111s, and won’t apply to cars called CPC-1232s that are built to higher standards adopted in October 2011, according to a BNSF notice. The Obama administration in July proposed phasing out thousands of the older tank cars within two years and lowering speed limits as part of new rules to reduce the risk of hauling crude by rail. The plan followed a series of fiery accidents, including the derailment and explosion of a crude train [...]

Energy Traders’ Obsession With Winter Begins

Filed in Prices by on 25 October 2014

There are almost as many weather-driven seasons in the world as there are things to count. Atlantic and Pacific hurricanes have a season. So do cyclones in the Indian Ocean and off Australia , fall foliage in the U.S. and cherry blossoms in Japan and Washington . Even colds, flu and allergies get time on the calendar. In a week, another season will start, one that will move markets and dent wallets: the U.S. heating season. From November to March, as temperatures fall, the U.S. will burn the most natural gas of the year. Some early forecasts suggest the Midwest, the major user of gas heat, might get a break from the prolonged “polar vortex” that punished it last year. In 2013, the U.S. consumed a little more [...]

Oil Producers Form New Group to Lobby to Lift Crude Export Ban

Filed in USA by on 25 October 2014

Oil producers are forming a coalition dedicated to ending the four-decade U.S. ban on crude exports, signaling a more serious turn in their push to sell to overseas customers. The Producers for American Crude Exports includes ConocoPhillips, along with at least 13 other companies, company spokesman Daren Beaudo said in a statement. Hess Corp. (HES) , Marathon Oil Corp. (MRO) , Continental Resources Inc. are also in the group, according to a disclosure statement filed to Congress. As U.S. oil production increases to its highest point in three decades, advocates for exports say the ban is anachronistic and they point to studies showing positive effects from allowing exports, including more production in the U.S. and cheaper gasoline prices. Even so, energy analysts and lobbyists said success for the effort isn’t certain in Washington, where the focus has long been on how to cut ties to [...]

Report: U.S. on path to energy independence

Filed in Oil Supply by on 25 October 2014

The United States is on the path to energy independence because it’s producing more reserves than it consumes, analysis from Wood Mackenzie finds. Wood Mackenzie finds oil and natural gas production in the United States is up 42 percent from 2007 in part because of hydraulic fracturing , horizontal drilling and other drilling applications tied to the shale industry. Higher production and lower demand, in turn, means the economy is relying less on external sources to meet its energy demands. “A country can achieve energy independence through two channels — it can either produce more or consume less, and the United States is doing both,” James Brick, a senior analyst at Wood Mackenzie, said in a Thursday statement. Wood Mackenzie finds demand is decreasing in United States because the transportation sector is [...]

Construction starts on Cameron LNG plant

Filed in exports by on 25 October 2014

 Construction began in Louisiana on a plant cleared to export around 1.7 billion cubic feet of U.S. natural gas per day, joint venture partners said. Officials from the consortium led by Sempra Energy and Japan’s Mitsubishi Corp. were on hand for the groundbreaking ceremony in Hackberry, La., for the Cameron liquefied natural gas project . “We look forward to 2018 when the first LNG cargo is loaded and on its way to global markets,” Farhad Ahrabi, chief executive officer at Cameron LNG, said in a Thursday statement. Development group Cameron LNG said the Hackberry plant represents a $10 billion investment. Once completed, it will be able to export 12 million tons of LNG, or around 1.7 billion cubic feet per day. The groups behind the project have export deals with several Asian countries. Critics of U.S.-sourced LNG [...]

Sanctions, Oil Prices May Harm Russian Economy, Ministers Warn

Filed in Russia by on 25 October 2014

Russia’s economy and budget may suffer if low oil prices and Western sanctions persist for some time, government ministers warned Friday.  In the government’s clearest acknowledgment so far of the pain Western sanctions and lower oil prices have inflicted on the economy, Russian Finance Minister Anton Siluanov said the government may need to cut its budget spending for the next three years. Economy Minister Alexei Ulyukayev, meanwhile, said if the ruble continues to weaken, the economy may contract next year.  Russia’s economy is suffering from falling oil prices, as oil revenue makes up about half of the state budget revenue, while the sanctions imposed by the West in response to Moscow’s policy toward Ukraine have almost shut the global financial markets to Russian companies.

‘Fracking tax’ in play in Pennsylvania governor race

Filed in Shale Gas by on 25 October 2014

Could this gas well in Washington Township be part of the solution to Pennsylvania’s underfunded public schools? Pennsylvania Republican Governor Tom Corbett’s reelection campaign is being fought, and lost, over the issue of public education. Corbett has consistently trailed his Democratic opponent by double digits in polls where voters have repeatedly identified education as their number one electoral priority. Tom Wolf, the Democrat, is running against the deep cuts Corbett made to state support for schools, which resulted in the loss of at least 23,000 education jobs and local property tax hikes statewide. In June, the Pennsylvania Association of School Administrators found that three-fourths of the surveyed school districts expected further tax increases this year . In response, Wolf promises to wrest desperately needed revenue from the [...]

Study: Oil, Gas Drilling Activities Provide Major Economic Stimulus for US

Filed in Oil Supply, USA by on 25 October 2014

The economic benefits to the United States from the energy industry have more than doubled in just the past ten years, even after accounting for inflation, according to a new study by The Perryman Group. The growth in the industry is worth about $1.2 trillion in gross product each year, the study noted, adding that the growth in the oil and gas industry since the economic recession has been “dramatic.” In fact, since the start of the economic recovery, the energy industry has contributed about 30 percent of the total job growth for the nation, Dr. Ray Perryman, president and CEO of The Perryman Group, said. While it is generally recognized that a thriving oil and gas sector helps to create new jobs within and outside of the energy sector, it is less well-recognized just how important the industry is to overall employment. However, the study shows just how [...]

Continental Confirms Productivity of Springer Play

Filed in Shale Oil by on 25 October 2014

Continental Resources Inc. confirmed the repeatability and growth potential of its new Springer play in the South Central Oklahoma Oil Province (SCOOP) with four new wells drilled in Grady County, Okla. The Oklahoma City-based company estimates the four new wells – which had an average horizontal lateral length of about 4,475 feet – to have estimated ultimate recovery (EUR) of 940,000 gross barrels of oil equivalent (boe) per well in the oil fairway of the play for a well with a 4,500-foot lateral section. The four recent wells were drilled to an average vertical depth of approximately 12,625 feet and average total measured depth of about 17,650 feet. “These individual delineation wells in the play are generating excellent returns, with shallow decline rates compared to other unconventional resource plays,” said Continental Chairman and CEO Harold G. Hamm in an Oct. 23 press statement. “We expect to realize even strong [...]

Oilfield Discovered Onshore UK near London’s Gatwick Airport

Filed in United Kingdom by on 25 October 2014

Several UK-focused oil and gas companies reported Friday that an oil discovery of perhaps up to 20 million barrels has been made near London’s Gatwick Airport in southern England. The discovery – made by the Horse Hill-1 well located on the northern side of the Weald Basin near Gatwick Airport – was of an oil accumulation in the conventional Upper Jurassic Portland Sandstone at a top reservoir depth of 1,791 feet. Solo Oil, one of a number of companies involved in the Horse Hill consortium, said that a preliminary most likely estimate of 3.1 million barrels of gross in place hydrocarbon volume has been calculated within the upper Portland, with a further gross un-risked in place prospective hydrocarbon volume of 16.8 million barrels of oil in a separate lower sand in the Portland interval located in an untested fault block to the south. The well is being deepened to [...]

New land rig orders, construction continues despite oil price drop

Filed in Shale Oil by on 25 October 2014

New orders for land rig building continue even amid the recent drop in oil prices, and analysts and drillers insist that industry’s appetite for new state-of-the-art drilling units has not been slaked. Big land drillers Patterson-UTI and Nabors said during respective third-quarter earnings calls this week that they have each contracted several newbuild rigs in the past three months. Patterson inked deals for seven of its trademark APEX rigs and Nabors for three of its new PACE-X brand rigs for US work in the Eagle Ford Shale of South Texas and the Tuscaloosa Marine Shale of Louisiana/Mississippi. The Tuscaloosa is an emerging but fast-developing play where industry continues to work out early-stage problems relating to the depth, pressure and optimal drilling zones of the reservoir. Not only are drillers still inking deals with upstream operators for newbuild rigs, particularly for US use, but customers [...]

Putin unleashes fury at US ‘follies’

Filed in Russia by on 25 October 2014

Russian President Vladimir Putin attends a meeting of the Valdai International Discussion Club in the Black Sea resort of Sochi ©AP Russian president Vladimir Putin on Friday accused the US of undermining the post-Cold War world order, warning that without efforts to establish a new system of global governance the world could collapse into anarchy and chaos. In one of his most anti-US speeches in 15 years as Russia’s most powerful politician, Mr Putin insisted allegations that its annexation of Crimea showed that it was trying to rebuild the Soviet empire were “groundless”. Russia had no intention of encroaching on the sovereignty of its neighbours, he insisted. More On this story Russia takes EU to court over sanctions EU energy deal will hurt Putin, says Davey Drinks with Russian soldiers in Lugansk Global Insight US experts fear Russia sanctions blowback Editorial Putin is leading Russia down an isolationist path [...]

Barroso: EU climate change mettle unrivaled

Filed in Climate by on 25 October 2014

Members of the European Union agreed early Friday to cut greenhouse gas emissions by 40 percent, increase the renewable energy footprint by 27 percent and enhance energy efficiency by 27 percent from a 1990 benchmark by 2040. “No player in the world is as ambitious as the European Union when it comes to cutting greenhouse gas emissions,” European Commission President Jose Manuel Barroso said in a statement. European member states account for about 11 percent of the global emissions. The agreement reached early Friday builds on a package of 20 percent targets for the three measures by 2020. Some member states had balked on protection for certain sectors of the energy industry, arguing economic interests in a struggling eurozone should be considered. ”The EU climate action commissioner is very proud that the 28 EU [...]

Naftogaz Sets Aside $3.1 Billion to Pay Ukraine Gas Bill to Gazprom, CEO Says

Filed in Ukraine by on 25 October 2014

Ukraine’s national gas company Naftogaz is ready to settle its outstanding debts for Russian natural gas imports ifGazprom signs a deal guaranteeing winter supplies.  Russia halted gas supplies to Ukraine in June over unpaid bills, saying state-owned Naftogaz owes it around $5 billion. It has said it won’t turn on the taps again without settlement of $3.1 billion of the debt this year and prepayment for deliveries of gas for November and December.  Ukraine has said Moscow had set an unfairly high gas price to punish its pro-western government and has disputed the amount that Russian state-gas company Gazprom says it owes.

Russian currency crashes

Filed in Russia by on 25 October 2014

By midday in Moscow, the currency hit bottom with trade at 42 rubles to the U.S. dollar. The Russian economy is burdened by Western sanctions targeting Russian energy companies. With oil trading below the $100 mark, sanctions were blamed for record inflation and a struggling ruble. Igor Sechin , the head of Russian oil company Rosneft, said Thursday a lawsuit was filed in Luxembourg against the European Union in retaliation against sanctions . “Our aim is to protect the interests of our shareholders,” he said. “We will always protect their interests at any cost.” Sechin in August asked the Kremlin to use a national welfare fund to support its growing debt. The company’s total production, meanwhile, is down to its lowest level in more than a year. Sechin and the oil company he leads [...]

British frack plans delayed by county council

Filed in United Kingdom by on 25 October 2014

British shale pioneer Cuadrilla Resources waiting for decision from country council in drilling proposals. UPI/Gary C. Caskey PRESTON, England, Oct. 24 (UPI) — Planners in the British county of Lancashire said they needed more time to consider drilling plans from shale pioneer Cuadrilla Resources. Cuadrilla in June deposited 21 chapters of environmental studies with the Lancashire County Council associated with plans for up to four shale gas exploration wells. The council said initially it would make a determination by early November, but said they now needed more time to make a decision . “The council has now written to Cuadrilla asking for further time to receive, organize, assess, and present all the relevant information for the application to be determined by the committee,” it said in a Thursday statement. Cuadrilla said there may be as much as 200 trillion cubic feet of shale natural gas in the Bowland basin [...]

Peak Oil is still the reality of the future

Filed in Peak Oil by on 25 October 2014

Peak Oil is still the reality of the future In a reply to my previous contribution, “The falling oil price may presage a future recession”, Civil Economist Magnus Grill ( 19 October in Swedish ) says that I assert, “that Peak Oil does not mean that oil will run out rather than that demand for oil will disappear. Thus it is no longer a question of Peak Oil from a production standpoint rather than now it is from a demand standpoint. This means that Aleklett has completely altered his early reasoning.” I must disappoint Magnus Grill. Peak Oil is still related to production of oil from oilfields. When we discuss Peak Oil we do this based on the fact that oil production in an area or group of areas reaches a maximum and then declines. There are several factors that determine the production profile when production begins [...]

Peter Thiel: Peak oil lives!

Filed in Peak Oil by on 25 October 2014

Peter Thiel last August Photo: Art Streiber for Fortune The famed investor says the fracking revolution, fuel efficiency standards, and slowing demand have only bought us time in the search for a true technological breakthrough Peter Thiel, whom we profiled in September in the cover story “ Peter Thiel Disagrees With You ,” is the founder of two billion-dollar companies (PayPal EBAY 0.46% and Palantir), a venture capitalist (his flagship Founders Fund now manages $2 billion in assets), a hedge fund manager, the first outside investor in Facebook FB -0.15% , and the author of the recently released book about launching startups, Zero to One . When his hedge fund, Clarium Capital, launched in 2002, Thiel followed a peak-oil thesis, which paid off splendidly as oil prices rose from about $40 to $140. But prices fell off a cliff in 2008, the fund got clobbered, and institutional investors fled. [...]

Technology has blindsided oil states

Filed in Shale Oil by on 25 October 2014

Technology has blindsided oil states “The price of oil will hit its floor and it will rise again,” President Nicolas Maduro assured Venezuelans, whose shaky economy depends critically on a high oil price. “Venezuela will continue with its social plans. Venezuela will move forward.” No it won’t, and neither will Russia, Iran or Nigeria. The only major oil exporters that are not in deep trouble are the Arab countries, whose governments have some room to manoeuvre because of low production costs, relatively small populations and big foreign currency reserves. Since June, the cost of a barrel of Brent crude, the benchmark for world oil prices, has fallen by almost a quarter, from around $110 a barrel (where it was stuck for the past four years) to just above $80 a barrel. Last month, for the first time in decades, Nigeria exported no oil at all to the United States. [...]

Oil Lower as Market Struggles With Oversupply

Filed in Prices by on 24 October 2014

Oil was trading lower on both sides of the Atlantic Friday morning, retreating after a bounce the previous day and still hovering close to multiyear lows. Oil is now trading at such a low level that it’s started to stimulate some demand, said analysts at Energy Aspects. “The drop in prices has started to support oil demand to a certain extent, with Asian demand showing some signs of life,” they said. However, further falls on Friday morning indicate that any stimulus is weak, and the market is still struggling with oversupply and the prospect that the glut of oil will only increase in the new year. Energy Aspects said “even with the improvement in demand, supplies remain well ahead of demand growth, partly due to the end of seasonal maintenance but primarily as OPEC production continues to increase.” The Organization of the Petroleum Exporting Countries is [...]

WTI Heads for Weekly Drop as Saudi Policy Seen Unchanged

Filed in Prices by on 24 October 2014

 West Texas Intermediate retreated from the biggest gain since September amid speculation a drop in Saudi Arabian oil supplies isn’t a signal that OPEC’s largest producer has decided to cut production. Brent slid in London . Futures fell as much as 1 percent in New York and are poised for a fourth weekly decline. Saudi Arabia’s crude supplies to the market declined last month even as production increased, a person familiar with the kingdom’s oil policy said yesterday. A New York City doctor tested positive for Ebola after returning from aid work in West Africa, spurring demand for haven assets including U.S. Treasuries. The market’s reaction to the fall in Saudi supply underscores the focus on the Organization of Petroleum Exporting Countries before the group’s meeting next month. The highest U.S. crude output in almost 30 years helped drive oil futures into a bear market [...]

Oil Futures Climb After Saudi Arabia Supply Said to Fall

Filed in Prices by on 24 October 2014

Brent gained the most in four months and West Texas Intermediate rebounded from a two-year low after market supplies from Saudi Arabia , the world’s biggest crude exporter, were said to have dropped. Saudi Arabia supplied 9.36 million barrels a day in September, down 328,000 from the previous month, according to a person familiar with the country’s policy. Oil, which has collapsed into a bear market on concerns over rising production, also advanced on improved economic reports ranging from manufacturing in Germany and China to U.S. jobs. “The Saudis are limiting the amount of crude oil available to the market,” said Gene McGillian , an analyst and broker at Tradition Energy in Stamford , Connecticut . “The market is using that as a bullish reason. Whether or not there will be a significant production cut from Saudi Arabia remains to be seen.” Brent for December settlement rose $2.12, or [...]

US natural gas storage volume rises 94 Bcf to 3.393 Tcf: EIA

Filed in Natural Gas Supply by on 24 October 2014

 US natural gas storage inventories rose by 94 Bcf to a total of 3.393 Tcf for the week that ended Friday, the US Energy Information Administration reported Thursday. The injection came in at the low end of a range from 94 Bcf to 98 Bcf that a consensus of analysts predicted. The build was above the 86 Bcf reported a year ago, as well as the 70-Bcf five-year average, according to EIA data. As a result, the 344 Bcf deficit to last year fell to 336 Bcf, while the 362-Bcf deficit to the five-year average of 3.731 Tcf fell to 338 Bcf. The EIA reported a build of 47 Bcf in the East, boosting inventories to 1.872 Tcf, compared with 1.94 [...]

Natural Gas Slides as Weather Forecasts Turn Warmer, Stockpiles Rise

Filed in Prices by on 24 October 2014

 Natural-gas futures fell to new 11-month lows on Thursday after weather forecasts pointed to limited demand for the heating fuel and government data showed a large increase in stockpiles. The front-month November contract fell 3.7 cents, or 1%, to settle at $3.622 a million British thermal units on the New York Mercantile Exchange. That is the lowest settlement since Nov. 19. Midday weather forecasting models showed a burst of cold air expected to arrive in early November will be milder than previously thought, likely leaving more natural-gas-fired heaters idle. The forecasts came in a lot warmer, said Aaron Calder, a senior analyst with energy consulting firm Gelber & Associates. Futures had traded higher earlier in the day, after the Energy Information Administration reported stockpiles of the fuel rose by slightly less than traders were expecting. Producers added 94 billion cubic feet of gas to storage for [...]

US negotiator: Some want talks with Iran to fail

Filed in Iran by on 24 October 2014

America’s chief nuclear negotiator believes that some U.S. allies and members of Congress don’t want diplomacy with Iran to succeed. The undersecretary of state for political affairs, Wendy Sherman, concedes the nuclear talks are controversial. She says some fear they’ll collapse while others fear they’ll succeed. Speaking at the Center for Strategic and International Studies, Sherman says the administration has sought to allay fears in Congress and among allies including Israel and Arab Gulf states. She says the conversations reinforce her government’s conviction that diplomacy is worth the risk. Negotiators want a deal by Nov. 24. World powers are seeking limits on Iran’s program so it can’t produce nuclear weapons. Iran says it wants to generate nuclear energy and is asking for sanctions relief.

Oil not only Islamic State target, advocacy group says

Filed in ISIL by on 24 October 2014

 Action beyond hitting the Islamic State’s oil revenues with bombs in Syria is needed if the campaign is to succeed, a peace advocacy group said. In September, U.S. President Barack Obama announced a military campaign to take out militants from the Sunni-led terrorist group in control of parts of Iraq and Syria. Now dubbed Operation Inherent Resolve , the campaign has focused on Syrian oil installations controlled by the group calling itself the Islamic State. Paul Kawika Martin, director of advocacy group Peace Action, said the military campaign has so far failed to contain IS. “Instead of methods that are likely to cause more extremism like air strikes to reduce oil revenues, other options include freezing bank accounts of ISIS supporters, negotiating with local villages where oil pipelines are being used and [...]

Isis sells smuggled oil to Turkey and Iraqi Kurds says US Treasury

Filed in ISIL by on 24 October 2014

The Islamic State of Iraq and the Levant (Isis) is earning as much as $1m a day through the sale of oil to some of its biggest enemies: middlemen from Turkey, Iraq’s Kurdish community and the regime of Bashar al-Assad, according to the US Treasury. The remarks – made in a speech to the Carnegie Endowment for International Peace on Thursday by undersecretary for terrorism and financial intelligence David Cohen – are likely to raise eyebrows in a region where questions are already being asked over Ankara’s commitment to fighting Isis and Kurdish fighters are battling to avoid being over-run by the jihadis in the Syrian city of Kobani . More On this story Battle revives Kurds’ nationalist ambitions Analysis Fuelling Isis Inc Video Turkey backed into corner over Kobani US urges Turkey to act against Isis Global [...]

Saudi Oil Supply Drop Unlikely to Herald New Policy

Filed in Saudi Arabia by on 24 October 2014

A drop in Saudi Arabian oil supply last month doesn’t necessarily signal that the biggest producer in OPEC is cutting exports to bolster prices. Brent crude jumped after a person familiar with the country’s oil policies said the amount it supplied to markets fell in September by 328,000 barrels a day. The drop came after domestic demand increased to the most in at least 12 years. The market’s reaction underscores the focus on the Organization of Petroleum Exporting Countries before the group’s meeting next month after a global glut of oil drove crude futures down into a bear market . OPEC increased output to the highest in almost three years and the Saudis pumped 100,000 barrels a day more than in August. “This is not yet a signal that Saudi Arabia has taken a step forward in markedly reducing oil supply with an objective to shore up prices,” Harry [...]

China Scores Cheap Oil 14,000 Miles Away as Glut Deepens

Filed in China by on 24 October 2014

China is finding oil supplies 14,000 miles away, aided by the global rout in prices that’s left producers vying for new markets. PetroChina Co. said it bought Colombian crude for a northern refinery for the first time because it was good value. The transaction underscores how the world’s second-biggest oil consumer is benefiting as producers from the Middle East to Latin America vie for customers in Asia. Brent oil futures tumbled to the lowest level since 2010 as the highest U.S. output in almost 30 years cuts its consumption of foreign crude. OPEC’s biggest producers are reducing prices to defend their market share. China consumed the second-biggest amount of crude on record in September and imported the largest volume ever for that time of year, customs data show. “China will just look to get the cheapest crude possible from whatever source it can,” Virendra Chauhan, a London-based analyst at [...]

U.S. Energy Exports to Top Imports by 2025, WoodMac Says

Filed in USA by on 24 October 2014

U.S. companies will export more energy than they import by 2025 as shale oil and gas production keeps climbing and the transportation sector becomes more efficient, Wood Mackenzie Ltd. said in a note today. Horizontal drilling and hydraulic fracturing in hydrocarbon-rich layers of shale rock have boosted U.S. oil and gas production by 42 percent in the past seven years. The U.S. vehicle fleet will become 40 percent more energy-efficient by 2030, said James Brick, a senior analyst at the Edinburgh-based research firm. “A country can achieve energy independence through two channels,” Brick said in the note. “It can either produce more or consume less, and the U.S. is doing both.” Crude production in the U.S. has risen to 8.9 million barrels a day, the highest level since 1985, according to data from the Energy Information Administration. Natural gas output is 2.3 trillion cubic feet a day, the highest [...]

Texas shale lifts Oxy output

Filed in Oil Supply by on 24 October 2014

 Occidental Petroleum Corp. said Thursday its quarterly production was boosted by Texas shale, but income was down for the third quarter. Occidental, known commonly by its ticker symbol Oxy, said reported income for the third quarter was $1.2 billion, compared with $1.6 billion for third quarter 2013. The company blamed the decline in part on the drop in oil prices since the second quarter. In terms of production, the company said output increased 20,000 barrels per day year-on-year. “For the fifth consecutive quarter, we have delivered strong year-over-year domestic oil production growth, bolstered by strong results from Permian [shale] resources, which grew by over 26 percent,” President and Chief Executive Officer Stephen Chazen said in a statement. Aggregate production from the Permian basin increased 58 percent from 2007 to reach 1.35 [...]

Continental Resources declares win in Oklahoma basin

Filed in Shale Oil by on 24 October 2014

The Springer reserve area in Oklahoma is emerging as one of the premier oil basins in the region, Continental Resources said Thursday. Continental, which has headquarters in Oklahoma City, said four wells in the Springer play inside the South Central Oklahoma Oil Province, known by its initials SCOOP, should yield as much as 940,000 gross barrels of oil equivalent for the company. “The Springer adds another significant oil resource driver to Continental’s strategic growth outlook,” Continental Chairman and Chief Executive Officer Harold Hamm said in a statement. “It’s distinguishing itself as the most productive play in Oklahoma, and it’s right in our back yard.” Oil services company Baker Hughes said shale basins in Oklahoma were among those witnessing the biggest gains in wells started during the third quarter. SCOOP lies in part of the Woodford shale that [...]

U.S. oil exports at highest level since 1957

Filed in USA by on 24 October 2014

EIA in its weekly petroleum status report said the United States exported 401,000 barrels of oil per day in July, the latest full month for which data are available. U.S. crude oil exports are restricted under legislation enacted in response to the embargo from Arab members of the Organization of Petroleum Exporting Countries in the 1970s. Some exports are permitted from Alaska’s Cook Inlet, to Canada for domestic consumption there and in other case-by-case scenarios. EIA said some of the oil exports include Canadian crude oil exported to the United States and then re-exported. “Typically, crude exports are sourced domestically and are sent only to Canada,” the Wednesday report from EIA found. “However, since April, crude exports have included modest amounts of Canadian-produced barrels that were moved through the United [...]

Bakken Study Analyzes Impact of Oil Prices on Development

Filed in Shale Oil by on 24 October 2014

Bismarck, ND-based KLJ Engineering recently completed a study commissioned by the North Dakota legislature to provide decision makers with data about the Bakken’s potential economic impact on the state through 2019. The full KLJ report , released in September of 2014, focused on 19 oil & gas producing counties in North Dakota, and incorporated three approaches to forecast the sustainability of oil and gas production: Economic analysis of the Bakken and Three Forks formation Projections of population, employment and housing needs Potential for CO2 enhanced oil recovery (EOR) Of particular interest to industry is the impact of falling oil prices on future development. Earlier this month, Lynn Helms, the Dir. of North Dakota’s Department of Mineral Resources (DMR), said two things could hurt production: low oil prices and new flaring regulations. Read more : Bakken Development Threats on the Horizon The KLJ study provided some interesting [...]

Why Gas Stations Are Cleaning Up Even As Prices Plummet

Filed in Prices by on 24 October 2014

Prices at the pump have tumbled to multiyear lows, but don’t worry about your local gas station. When oil prices spike, so do gasoline prices, as retailers pass along the higher cost to consumers. But when prices fall, gas stations can keep retail prices higher for longer. Gasoline futures, which roughly track wholesale prices before taxes and transportation costs, have fallen 31% from mid-June to settle Wednesday at $2.1556 a gallon, near four-year lows. In the same period, the national retail average cost of gasoline fell 16% to $3.094 a gallon, according to the Oil Price Information Service. Between the wholesale and retail price sit the retailers. The difference between retailers’ net gasoline costs, including taxes and transportation, and the cost they charge at the pump rose to 36.9 cents a gallon on average last week, from 25.6 cents a gallon a month before, OPIS [...]

U.S. Oil Seen as Buffer for Global Prices and Supply

Filed in Oil Supply, Prices by on 24 October 2014

U.S. oil output is buffering global crude prices and critical to the world’s supply balance amid the threat of disruptions, even as a ban on domestic exports remains in place, Energy Secretary Ernest Moniz said. A surge in the nation’s oil output comes as markets are faced with near-historic highs of unanticipated outages, Moniz, 69, said at a talk organized by the public-affairs forum Commonwealth Club in San Francisco yesterday. He agreed with a government report finding U.S. gasoline prices may drop should the prohibition on crude exports be lifted. Moniz is leading the Energy Department through an unprecedented boom in U.S. fuel production. The nation’s oil output has jumped to a 28-year high and natural gas supplies have increased by so much companies are building terminals to send the fuel overseas. The surge has prompted his agency to review everything from the country’s four-decade ban on crude exports [...]

Chevron Announces Oil Discovery in Deepwater U.S. Gulf of Mexico

Filed in Oil Supply by on 24 October 2014

Chevron Corporation today announced a new oil discovery at the Guadalupe prospect in the deepwater U.S. Gulf of Mexico. The Keathley Canyon Block 10 Well No. 1 encountered significant oil pay in the Lower Tertiary Wilcox Sands. The well is located approximately 180 miles off the Louisiana coast in 3,992 feet of water and was drilled to a depth of 30,173 feet. “The discovery further demonstrates Chevron’s exploration capabilities,” said George Kirkland, vice chairman and executive vice president, Upstream, Chevron Corporation. “Guadalupe builds on our already strong position in the deepwater U.S. Gulf of Mexico, a core focus area where we expect significant production growth over the next two years.” Image: Discoverer India The Guadalupe well was drilled by Transocean’s Discoverer India deepwater drillship. “The Guadalupe discovery adds momentum to our growing business in North America,” said Jay Johnson, senior vice president, Upstream, Chevron Corporation. [...]

Increasing Oil Reserves and Peak Oil

Filed in Peak Oil by on 24 October 2014

In public lectures that I give about global energy, I often note that since the writing of A Cubic Mile of Oil the global reserves of oil have increased, not decreased, despite the fact that in the intervening time (i.e., between 2007 and 2013) the world has consumed about 7.5 cmo. In this post I want to dig deeper and look at the changes that have brought about this paradox, and what it means for Peak Oil. As I explain in the book, reserves have a special meaning refer to those geologic accumulations that can be economically extracted with the current technology. With the development of technology and/or changes in the price of oil, geologic accumulations that were once only part of the larger resource base may get transferred to the reserves. Focusing only on the reservesis apt to give a wrong impression about the total availability of oil. [...]

BP, GDF Suez make North Sea oil find

Filed in United Kingdom by on 24 October 2014

 GDF Suez and British counterpart BP said Thursday they made a significant new oil discovery in the central waters of the North Sea. “As BP marks its 50th year in the North Sea and as the industry looks to maximize economic recovery from the basin, increasing exploration activity and finding new ways to collaborate will be critical to realizing remaining potential,” Trevor Garlick, BP’s regional president, said in a statement. “This discovery is a great example of both.” The discovery, which straddles two license areas operated separately by the companies, tested at an initial flow rate of 5,350 barrels of oil equivalent per day. Garlick said the discovery shows how more oil can come from North Sea basins if regional players join forces to capitalize on what he said was a considerable [...]

Russia may go it alone on arctic exploration

Filed in Russia by on 24 October 2014

U.S. energy company Exxon Mobil has a partnership with Russian oil company Rosneft for work in the arctic waters of Russia. With Western sanctions impeding developments, the Russian government has placed a greater emphasis on domestic exploitation of arctic reserves . “Where the Arctic is concerned, we will probably grant the last licenses on the arctic shelf [exploration] to Rosneft and Gazprom,” Orest Kasparov, deputy director of the Russian Federal Agency for Subsoil Use said. Western governments blacklisted Rosneft and other Russian energy companies in response to the Kremlin’s stance on the separatist campaign in eastern Ukraine. In mid-September, the European Union took additional steps by barring Russian oil company Rosneft and its counterparts Transneft and Gazprom Neft from working in European capital markets. Sanctions have hit a Russian economy that depends heavily [...]

Barroso Says EU Can Give Ukraine At Most $1 Billion to Pay Bills

Filed in Ukraine by on 24 October 2014

European Commission President José Manuel Barroso told the bloc’s leaders Thursday that the EU’s executive body could give Ukraine a maximum $1 billion (EUR790 million) in the near term out of its budget to help Kiev pay its bills, according to several officials briefed on discussions.  The money could be made available to Ukraine quickly in order to help Kiev settle a gas bill to Russia that would allow Ukraine to start receiving gas from Russian energy company OAO Gazprom again.

Oil Futures Subdued as China Data Fails to Lift Market

Filed in Prices by on 23 October 2014

Crude-oil futures were in negative territory in Asian hours Thursday as a positive reading of Chinese manufacturing for October failed to prop up oil prices, or offset the impact of a large build-up in U.S. oil inventories. On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $80.44 a barrel at 0421 GMT, down $0.08 in the Globex electronic session. December Brent crude on London’s ICE Futures exchange fell $0.08 to $84.63 a barrel. The preliminary HSBC China Manufacturing Purchasing Managers Index, a key gauge of activity in the manufacturing sector, rose to 50.4 in October, compared with a final reading of 50.2 in September. This was the third positive data point from China this week, after the GDP and industrial production numbers that pointed to stabilizing economic growth in the world’s No. 2 economy. But oil prices, which are [...]

WTI Trades Near 2-Year Low as U.S. Stockpiles Gain

Filed in Prices by on 23 October 2014

West Texas Intermediate traded near the lowest closing price in two years after government data showed crude stockpiles gained more than forecast in the U.S., the world’s biggest oil consumer. Brent fell in London . Futures slid as much as 0.6 percent in New York , extending a 2.4 percent decline yesterday. Crude stockpiles expanded 7.1 million barrels last week, the Energy Information Administration reported yesterday, compared with a 3 million increase predicted in a Bloomberg News survey. The Organization of Petroleum Exporting Countries needs to reduce output by 500,000 barrels a day because the market is oversupplied, said Samir Kamal, Libya ’s governor to the 12-member group. Crude has collapsed into a bear market as producers including Saudi Arabia cut export prices. Global supplies are rising as the U.S. pumps the most oil in almost three decades and Russia ’s output nears a post-Soviet record. “Oil’s getting a [...]

WTI Falls as U.S. Inventories Increase More Than Expected

Filed in Prices by on 23 October 2014

West Texas Intermediate crude fell after an Energy Information Administration report showed U.S. inventories increased more than expected last week. Stockpiles climbed 7.11 million barrels in the week ended Oct. 17, the EIA, the Energy Department’s statistical arm, said in a weekly report. Analysts surveyed by Bloomberg had expected a gain of 3 million. Supply at Cushing, Oklahoma , the delivery point for WTI futures, rose to 20.6 million. WTI for December delivery slid 71 cents, or 0.9 percent, to $81.78 a barrel at 10:32 a.m. on the New York Mercantile Exchange. The November contract expired yesterday. The volume of all futures traded was about 20 percent below the 100-day average for the time of day. Brent for December settlement fell 20 cents, or 0.2 percent, to $86.02 a barrel on the London-based ICE Futures Europe exchange. Volume was 23 percent below the 100-day average. The European benchmark crude [...]