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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 [...]

Plunging oil prices challenge geopolitical, energy industry assumptions

Filed in Prices by on 23 October 2014

Cheaper petroleum spells bad news for oil producers and is challenging received industry wisdom Global oil prices have fallen 25 percent since June, marking the return of oil-price fluctuation as a geopolitical wild card. Although oil prices have been relatively stable — about $100 a barrel — for the past five years, the historical pattern has seen high oil prices boost the strategic clout of producing countries by boosting government coffers, and falling prices have had the opposite effect. The lower prices of the 1980s and ’90s, for example, weakened Russia’s geopolitical position, while the more recent increases have boosted Moscow’s ability to exert influence over former Soviet republics. Higher prices have enabled Venezuela’s leadership to strengthen opposition to U.S. influence throughout Latin America.  Fluctuations have had significant effects on economic growth. The fourfold [...]

Airstrikes target oil field in eastern Syria

Filed in Syria by on 23 October 2014

Activists say the U.S.-led coalition has launched airstrikes on an oil field in Syria’s eastern province of Deir el-Zour that borders Iraq. The Britain-based Syrian Observatory for Human Rights said the coalition launched four airstrikes on oil wells in the Jafra field late Wednesday. The Local Coordination Committees, an activist group, also reported the airstrikes on Thursday. The U.S.-led coalition has aggressively targeted IS-held oil facilities in Syria, which provide a key source of income for the militants. But such strikes also endanger civilians, which could undermine long-term efforts to destroy the militant group. The Observatory, which relies on a network of activists around the country, said that since the airstrikes on Syria began a month ago, 553 people have been killed including 32 civilians. The rest were mostly jihadis.

U.S. providing backup in push to retake Baiji, Anbar

Filed in Iraq by on 23 October 2014

 The U.S. military is significantly expanding its area of operations in Iraq, providing air support, intelligence, and on-the-ground assistance to Iraqi security forces trying to reassert control over Baiji and Anbar – two areas where they have recently suffered major setbacks.In Baiji, insurgents led by the so-called Islamic State (IS) organization have used anti-aircraft weapons to shoot down at least two Iraqi helicopters in recent weeks. Pro-government forces guarding the country’s lar…

Libya OPEC Governor Calls for Output Cut Amid Oil Plunge

Filed in OPEC by on 23 October 2014

Print Back to story Libya’s OPEC governor called for the group to reduce oil output by at least 500,000 barrels a day as its biggest members discount supplies to defend market share rather than cut production to boost prices. The market is oversupplied by about 1 million barrels a day, Libya’s Samir Kamal said by e-mail yesterday. His comments reflected personal views, not the official Libyan position, he said. They mark the first time a member nation representative is suggesting how much production needs to be reduced after prices entered a bear market . Brent crude , a benchmark for more than half of the world’s oil, has tumbled about 25 percent since June, as producers including Saudi Arabia cut export prices to stimulate demand amid the highest U.S. output in almost 30 years. Banks including BNP Paribas SA and Bank of America Corp. predict the price rout may [...]

Saudis at War With Islamic State Confront Echo of Kingdom’s Past

Filed in Saudi Arabia by on 23 October 2014

When Saudi rulers send warplanes on missions against Islamic State, they’re targeting a group whose theocratic ideology and roots in desert warfare overlap at least partly with the kingdom’s own present and past. The world’s largest oil exporter has evolved into a mostly urban society in its eight decades of statehood, yet nomadic fighters erupting from the desert in a blaze of religious zeal are still part of its foundation narrative. Today in Saudi Arabia , as in the territory controlled by Islamic State in Syria and Iraq , women must wear black abayas, shops all close during prayer times, religious police enforce Islamic laws and criminals face violent punishment. Saudi Arabia, like its longtime U.S. ally, sees Islamic State as a terrorist group and has joined the war against it. Yet the jihadists share some common ground with their Saudi opponents, even if that’s outweighed by their differences, [...]

Exxon Partner Oil Search to Decide on LNG Expansion by End 2016

Filed in New Guinea by on 23 October 2014

Oil Search Ltd. (OSH) plans to decide on adding new liquefied natural gas processing plants by the end of 2016, as the Papua New Guinea-focused company outlined plans that may double output by early next decade. Oil Search also will return as much as half of its profit to shareholders in dividends after the start earlier this year of a $19 billion LNG project in Papua New Guinea , the Port Moresby-based company said today in a statement. The Exxon Mobil Corp.-led LNG project will also allow Oil Search to fund expansion, the company said following a review of its strategy. Oil Search said it expects two or three more LNG production units to be built in the country with the development of InterOil Corp. (IOC) ’s Elk and Antelope discoveries. “New LNG development in PNG will be among the most competitive in the region,” Neil Beveridge , a [...]

Shell finds gas off the coast of Gabon

Filed in Gabon by on 23 October 2014

Shell announced Wednesday it made a substantial discovery of natural gas in the deep waters off the coast of the West African nation of Gabon. The company said it ran into a 656-net foot column of natural gas in its Leapord-1 frontier exploration well off the Gabonese coast. The well was drilled in water more than a mile deep into a basin trapped beneath a deep layer of submarine salt. “Shell and partners [at China National Offshore Oil Corp.] are planning to undertake an appraisal program to further determine the resource volumes,” the company said in a statement. Gabon’s geological similarities to Brazil raised hopes for oil production among energy explorers, but so far the region has turned up mostly natural gas. Italian energy company Eni and Australian [...]

Coal Miners Fired in Appalachia Getting Hired in Wyoming

Filed in Coal by on 23 October 2014

It’s boom times in Wyoming for embattled U.S. coal companies, where the mining industry is hiring workers while shedding them in Appalachia. Alpha Natural Resources Inc. (ANR) , the second-largest U.S. producer, hasn’t posted a profit in three years and is closing money-losing mines in West Virginia amid plans to increase production out West by as much as 30 percent. Miner Steven King is going along for the ride. After losing his job last month at the company’s Black Castle operation, King, 42, is getting ready to move his family 1,500 miles (2,400 kilometers) to a state he’s never visited to work at an Alpha site in Wyoming. With the U.S. coal industry in its worst decline in decades, companies including Alpha and Peabody Energy Corp. (BTU) , the biggest producer, are pivoting toward pockets of future profit. No prospect is bigger than the Powder River Basin, a high, [...]

U.S. emissions up after last year’s brutal winter

Filed in Climate by on 23 October 2014

 The amount of carbon dioxide emitted from energy use in the United States increased last year because of the brutal winter, the Energy Department said. The department’s Energy Information Administration said energy-related CO2 emissions increased 2.5 percent from 2012 levels. “The 2013 increase was largely the result of colder weather leading to an increase in energy intensity,” EIA said in a Tuesday report. PJM Interconnection, a company operating the electric grid for more than a dozen Midwest and mid-Atlantic states, twice broke records for seasonal use early this year during the brutal cold snap brought on by a weather phenomenon known as a polar vortex. The company had called for conservation measures as most states east of the Mississippi River endured temperatures well below the freezing mark for [...]

Report: Fracking in California dirty business

Filed in Shale Oil by on 23 October 2014

 More than 30 percent of Californians living near oil and gas wells reside in areas already heavily polluted, the Natural Resources Defense Council said. A Wednesday report from the NRDC looked at state records to determine what portion of the state’s population are, or could be, impacted by hydraulic fracturing operations . It found about 14 percent of the state’s population live within a mile of an oil or natural gas well and more than 30 percent of those live near industrial facilities or other environmental dangers. The advocacy group found that percentage of the population may be at risk should the state’s oil and natural gas sector expand. It said it found a link between hydraulic fracturing operations and respiratory and neurological problems. “Fracking is moving next door to [...]

U.S. mulls oil, gas lease offshore Alaska

Filed in USA by on 23 October 2014

The U.S. federal government said it plans to prepare an impact statement in support of a possible oil and gas lease sale in Cook Inlet, off the Alaskan coast. “We need to hear from residents of the communities along Cook Inlet on how the proposed leasing area is currently being used and what specific areas need extra attention,” Walter Cruickshank, acting director of the Bureau of Ocean Energy Management, said in a statement. The BOEM said its planned environmental impact statement will focus on what impact, if any, leasing, exploration, development and production of oil or natural gas in the region would have on the regional ecosystem. The agency said Tuesday the potential lease sale avoids areas designated as critical habitat of sea [...]

Fracking Companies Become Victims of Their Own Success

Filed in Shale Gas by on 23 October 2014

Drillers for Pennsylvania’s natural gas are facing a growing threat—from their own productivity.  Hydraulic fracturing and other new drilling techniques have caused the amount of natural gas flowing out of the state’s Marcellus Shale to soar in recent years. Production is expected to hit 16 billion cubic feet a day next month, nearly double what it was two years ago, according to a federal-government estimate.  The fracking surge has overwhelmed pipelines, creating a local glut that has caused gas prices to crater and forced drillers to re-evaluate operations. The situation became more pressing this summer, when federal regulators delayed construction of a pipeline meant to help producers move more gas by the end of next year. Some analysts say they don’t expect enough new pipeline capacity to be available until 2017.

Low Oil Prices Hurting U.S. Shale Operations

Filed in Shale Oil by on 23 October 2014

 Slumping oil prices are putting pressure on U.S. drillers. The number of active rigs drilling for oil and gas fell by their most in two months, according to the latest data from oil services firm Baker Hughes . There were 19 oil rigs that were removed from operation as of Oct. 17, compared to the prior week. There are now 1,590 active oil rigs, the lowest level in six weeks . Select the reports you are interested in:Who Will be the Big Winners in the Coming LNG BonanzaHow to Play the Coming Boom in Advanced Fracking TechnologyWhy the Subsea Processing Sector will See Huge Gains in the Near FutureInvestment Opportunities [...]

Shale Activity Creating Need for Updated Data Management Systems

Filed in Shale Oil by on 23 October 2014

Shale_Activity_Creating_Need_for_Updated_Data_Management_Systems Hess To Form MLP For North Dakota Oil, Gas Transport Assets Oil and gas companies should truly understand the scope of their operations before investing in technology solutions to address the complexity and volumes of data in shale operations. The current boom in shale activity in the United States is creating changes in business processes that are causing companies to react and analyze their information differently, according to oil and gas industry experts with Deloitte. Oil and gas industry drilling practices have been based on premises established a century ago, when companies drilled vertical wells and relatively straightforward operations. However, shale oil and gas wells are more complex, with multiple laterals, directions and zones. As a result in the shift in technology and drilling practices such as pad drilling, the doubling of lateral well lengths since 2008 from 5,000 feet to over 10,000 feet, and sheer number [...]

Leave it to $80 crude to shake up US petrochemicals

Filed in Prices by on 23 October 2014

There’s something about $80/barrel crude that gets petrochemical markets in the US all riled up. As the energy complex slowly emerges from its latest dip, let’s take a look at how some of these key markets fared over the past two weeks. We’ll start with the usual suspects — aromatics — and move our way down to more “decoupled” markets — i.e., those closer to natural gas. Benzene US prices had been tanking for a while, in essence since early August as demand eroded and imports from Asia picked up. But things got serious in recent weeks. The market saw prices shed nearly 12% in a matter of days, culminating with last week’s prompt pricing hitting a 34-month low of 375 cents/gal ($1,121.25/mt) FOB USG on Oct. 15, before recovering some so far week. As a whole, benzene prices have fallen some 27% since late July. There’s no doubt slower demand [...]

Russian inflation spikes on sanctions pressure

Filed in Russia by on 23 October 2014

The European Bank for Reconstruction and Development said sanctions imposed on Russian energy companies Rosneft, Gazprom Neft and others in response to the crisis in Ukraine were taking their toll on the Russian economy . The Russian Central Bank earlier this year said it expected inflation to stay around 7 percent. Central Bank First Deputy Director Kseniya Yudaeva said a weekly gauge on the inflation rate showed an increase. “It’s already at 8.3 percent,” the director said. Russian state-backed media RIA Novosti reported slumping oil prices were putting additional strains on the Russian economy. Russia’s credit rating was downgraded last week by international ratings agency Moody’s. The agency downgraded the credit rating for St. Petersburg and Moscow this week because of market risks.

West out of step on Ukraine, Kremlin says

Filed in Russia by on 23 October 2014

Russian Foreign Minister Sergei Lavrov says Western powers encroaching on Kremlin’s turf with stance on Ukraine. UPI Geopolitical tensions over Ukraine are a result of Western efforts to preserve long-standing regional divisions, the Russian foreign minister said Wednesday. Western powers enacted tough economic sanctions on Russian energy companies in response to the Kremlin’s policies regarding the former Soviet republic of Ukraine. Russian Foreign Minister Sergei Lavrov said it was the West that was out of step with the region . “The Ukrainian crisis is a direct consequence of the attempts of our Western colleagues again to preserve and move to the east the dividing lines in the Euro-Atlantic area,” he said. Russia annexed the Crimean Peninsula of Ukraine in the aftermath of political upheaval that follows Ukraine’s pivot toward the European Union. Pro-Russian separatists have jockeyed for more autonomy in eastern Ukraine since then. The crisis has spilled over [...]

Rosneft Seeks More Aid from Russian Government

Filed in Russia by on 23 October 2014

Russia’s largest oil company, state-controlled Rosneft, has asked the government for over 2 trillion rubles ($49 billion) in aid to weather Western sanctions, Finance Minister Anton Siluanov said Wednesday, according to local news agencies.  Rosneft had asked for 1.5 trillion rubles in aid ($42 billion at the time) from the government in mid-August.  Rosneft, which has a net debt of about $55 billion, has been targetedby Western sanctions against Russia in response to Moscow’s annexation of Crimea and its support of pro-Russian separatists in eastern Ukraine.

At Valdai Club Meeting in Russia, Divergent Views of Ukrainian Crisis

Filed in Russia by on 23 October 2014

An annual event that brings together Russian officials and foreign experts opened Wednesday, revealing strongly divergent views over the reality of the crisis in Ukraine and exposing what appears to be President Vladimir Putin ’s ever-tightening grip on his country.  It also laid bare qualms both in Russia and the West about whether U.S. and European Union sanctions against Moscow over its actions in Ukraine are damaging those who seek normal relations with the West—and further fueling Russian nationalism.  The so-called Valdai Club, named for the lake on the shores of which its first meeting was held, distinguishes itself from other forums by giving rare access to decision makers in Moscow, who usually speak on condition they not be named.

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Eight Pieces of Our Oil Price Predicament

Filed in Peak Oil by on 23 October 2014

A person might think that oil prices would be fairly stable. Prices would set themselves at a level that would be high enough for the majority of producers, so that in total producers would provide enough–but not too much–oil for the world economy. The prices would be fairly affordable for consumers. And economies around the world would grow robustly with these oil supplies, plus other energy supplies. Unfortunately, it doesn’t seem to work that way recently. Let me explain at least a few of the issues involved. 1. Oil prices are set by our networked economy. As I have explained previously , we have a networked economy that is made up of businesses, governments, and consumers. It has grown up over time. It includes such things as laws and our international trade system. It continually re-optimizes itself, given the changing rules that we give it. In some ways, it [...]

Increasing Oil Reserves and Peak Oil

Filed in Peak Oil by on 23 October 2014

Increasing Oil Reserves and 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. The chart below shows the historic data from the 2014 edition of the BP Statistical Review of Global Energy (BP2014) for the World Proved Reserves and the Reserves to Production (R/P) ratio. This ratio has often been mistakenly interpreted as the years to exhaustion. Likewise, current price of oil largely reflects the immediate surplus or shortage of supplies, and reflects more on the conditions above ground (in the supply [...]

WTI Oil Holds Above $82 as U.S. Fuel Supply Seen Falling

Filed in Prices by on 22 October 2014

West Texas Intermediate crude held above $82 a barrel before a report that may show motor-fuel inventories shrank to a two-year low in the U.S., the biggest oil consumer. Brent was steady in London . December futures were little changed in New York . Gasoline stockpiles probably fell by 1.45 million barrels to 204.2 million, according to a Bloomberg News survey before data from the Energy Information Administration today. That would be the lowest since November 2012. Inventories of the fuel slid by 500,000 barrels through Oct. 17, the American Petroleum Institute reported yesterday, according to Bain Energy. Oil is paring its collapse into a bear market as banks including BNP Paribas SA and Bank of America Corp. predict the rout may be over. They’re in part counting on the Organization of Petroleum Exporting Countries to reduce supply as the U.S. pumps the most oil in almost three decades. [...]

Crude Rises After Chinese Growth Exceeds Expectations

Filed in Prices by on 22 October 2014

West Texas Intermediate crude rose as Chinese economic growth exceeded analysts’ estimates, signaling stronger fuel demand in the world’s second-biggest oil-consuming country. Brent futures gained in London . China ’s gross domestic product advanced 7.3 percent in the July-September period from a year earlier, the statistics bureau said today in Beijing. That exceeded the 7.2 percent median estimate in a Bloomberg survey of analysts. A government report tomorrow is projected to show that U.S. crude supplies climbed last week as fuel stockpiles declined. WTI fell below $80 a barrel for the first time since June 2012 last week. “The Chinese numbers gave the market a boost,” Gene McGillian , an analyst and broker at Tradition Energy in Stanford, Connecticut , said by phone. “We’ve lopped off a lot of value recently. If we can’t get above $85 decisively we’ll continue with the down trend.” WTI for November delivery, which [...]

Natural Gas Snaps Five-Session Losing Streak

Filed in Prices by on 22 October 2014

Natural gas snapped a five-session losing streak Tuesday but held near 11-month lows, as traders weighed near-term forecasts for mild weather against uncertainty about how much the upcoming winter will raise demand for the heating fuel. Natural gas for November delivery settled up 4.1 cents, or 1.1%, at $3.711 a million British thermal units on the New York Mercantile Exchange. Prices closed at the second-lowest level of the year. Cold temperatures boost demand for natural gas, which half of all American households use as a primary heating fuel. Weather forecasts for the next two weeks are predicting above-normal temperatures across the Central and Eastern U.S. “A burst of warming into the Midwest and East late this weekend into the first half of next week looks a bit stronger again today,” said forecaster Commodity Weather Group LLC in a note Tuesday. However, traders are still waiting [...]

Consumed by Islamic State, Iraq’s Anbar province a key battleground again

Filed in Iraq by on 22 October 2014

In recent weeks, the world has watched the battle to save Syria’s border town of Kobani from Islamic State. But the radical jihadists have for longer been engulfing another strategically more vital target – Iraq’s western Anbar province and its road to Baghdad. The vast desert region – where Sunni tribes rose up in 2006 and 2007 to drive out al-Qaeda with the Americans – has throughout 2014 been parcelled up, city by military camp, before the Iraqi government and U.S. forces could act. Now Anbar’s largest airbase Ain al-Asad, the Haditha Dam – a critical piece of infrastructure – and surrounding towns are encircled by Islamic State to the west from the Syrian border and to the east from militant-controlled sections of Ramadi. IS has grown so strong over the last year that “they are like an octopus stuck to your face,” said a Baghdad-based [...]

Official: Iran’s economy too vulnerable to oil market

Filed in Iran by on 22 October 2014

Maryam Rahmanian Hamid Farnam, the energy commissioner in the Iranian Chamber of Commerce, told the Oil Ministry’s news website Shana the government should work to slowly push oil revenue out of the national budget . “As long as we look at oil as a commodity for collecting revenues, not as a capital good, fluctuations in the world oil market will influence our economy,” he said. An assessment from the World Bank finds the Iranian economy is contracting. Sanctions imposed by Western powers on Iran’s energy sector resulted in a 5.8 percent decline in gross domestic product last year. The bank said the dependence on oil revenue makes the Iranian economy “intrinsically volatile.” Farnam said the government should work to cut the share of oil revenue in the total budget to nothing within a three- or four-year period. [...]

China reviewing oil relationships with Sudan, South Sudan, researcher says

Filed in China, Sudan by on 22 October 2014

The Chinese government and China National Petroleum Corp. are reviewing their relationships with Sudan and South Sudan following years of growth that changed both sides, a researcher said at Johns Hopkins University’s School for Advanced International Studies . “Sudan was a launching pad for CNPC to become a global corporation through financial and resource benefits,” said Luke Patey, a senior researcher at the Danish Institute for International Studies and author of “ The New Kings of Crude: China, Oil, and Civil War in Sudan and South Sudan .” “For much of the 2000s, CNPC took 40% of its oil from Sudan through subsidiaries as well as through the main subsidiary,” Patey said during an Oct. 20 event hosted by the SAIS China-Africa Research Initiative. “Things started to go bad for CNPC when the two Sudans signed a comprehensive [...]

How will Saudi Arabia respond to lower oil prices?

Filed in Saudi Arabia by on 22 October 2014

Oil prices (along with prices of many other commodities ) have fallen dramatically since last summer. Some observers are waiting to see if Saudi Arabia responds with significant cutbacks in production. I say, don’t hold your breath. Source: FRED. Source: FRED . When oil demand fell in the 1981-82 recession, the Saudis cut production by 6 million barrels a day in an effort to soften the decline in oil prices. They also cut production in response to lower demand in the 2001 recession and the most recent recession. On the other hand, the kingdom boosted production quickly beginning in August 1990 and January 2003 in anticipation of lost production from Iraq in the two Gulf Wars. This historical behavior led many observers to believe that Saudi Arabia would always play the role of a swing producer to stabilize the price of oil. Monthly crude oil production from Saudi [...]

Libya’s Rival Regimes Keep Oil Flowing From Split Nation

Filed in Libya by on 22 October 2014

Libya’s warring factions have pledged to keep the North African country’s crude flowing, putting pressure on other OPEC nations to curb output when the group supplying 40 percent of the world’s oil meets next month. Libya’s production has risen even as violence and political disputes have left the country under the rule of two competing administrations: the internationally recognized government of Abdulla al-Theni and the Islamist-led cabinet of Omar al-Hassi. Both authorities are seeking to keep oil output stable as various militias battle for influence. “It is almost beyond me that the Libyans managed to maintain production, considering that there is no government, and with all these militias,” Ole Hansen, head of commodity strategy at Saxo Bank A/S, said in an interview Oct. 20 in Dubai. “It is almost a miracle that they managed to get back production to where they have managed to get it back to.” Libya, [...]

Trinidad Refinery Swaps Crude Sources on Ebola Scare

Filed in Trinidad & Tobago by on 22 October 2014

Trinidad & Tobago is substituting crude from Gabon with Colombian and Russian shipments amid protests by refinery workers alarmed by the outbreak of Ebola in other African countries. Energy Minister Kevin Ramnarine halted oil purchases from Gabon, the Caribbean country’s only African supplier in the past 20 months, he said in an e-mailed response to questions. The decision follows the refusal of workers from Petrotrin, which operates Trinidad’s sole refinery, to assist with the berthing of a tanker that arrived in Trinidad waters on Oct. 18 from Gabon. The vessel, called Overseas Yellowstone, eventually docked late yesterday using outsourced tugs and labor, Ramnarine said. “The situation is dynamic and we will review if need be,” the minister wrote. “It should, however, be noted that there is no Ebola outbreak in Gabon.” Gabon, which has had Ebola outbreaks in 2001-2002, 1996-1997 and 1994, is not among countries currently citing cases [...]

Royal Dutch Shell Sells More Nigerian Assets

Filed in Uncategorized by on 22 October 2014

Royal Dutch Shell PLC said Tuesday it has signed agreements to sell all of the Nigerian oil assets it put up for sale last year, the latest move by the Anglo-Dutch oil major to reduce its exposure to the West African nation.  A spokesman for Anglo-Dutch oil giant Shell said it—along with Italy’s Eni SpA and France’s Total SA —have signed an agreement to sell a 45% stake in Oil Mining Lease 18 to a consortium that includes Canadian company Mart Resources Inc. The terms of the deal weren’t disclosed.  The remaining 55% interest in the block—which produces up to 30,000 barrels a day—will be retained by the Nigerian National Petroleum Corp., Mart Resources said in a statement. The acquisition is subject to numerous terms and conditions including receipt of Nigerian government approval, it added.

Nigeria Can’t Cope With Drop in Crude Oil Price – NECA

Filed in Nigeria by on 22 October 2014

The Nigeria Employers Consultative Association (NECA) has berated the federal government over what it described as its lackluster plan on how the country will deal with the fall in international price of crude oil. The Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, had recently said the federal government has put in place contingency plans to deal with the dwindling price of crude oil. But speaking at a press conference in Lagos, Director-General of NECA, Mr. Olusegun Oshinowo, said government ought to flesh out such plans as well as explain the implications of the fall in the price of crude oil to Nigerians and how the nation would cope with the development. He warned that the country is prone to serious economic crisis if there are no concrete plans to deal with the situation and advised Nigerians to cut down on their skyrocketing expenses. He reasoned that [...]

Diesel Deregulation Frees Up Billions for India to Spend More Wisely

Filed in India by on 22 October 2014

ByAnant Vijay Kala India’s decision to end government control of diesel fuel prices will save the government billions of dollars which can be better spent on more pressing needs such as building schools, roads and ports, analysts say. India announced over the weekend that it would end a decades-old policy of controlling the retail price of diesel fuel. Providing diesel at below-market rates cost the government about $10 billion last year, hampering India’s ability to spend on other things. The government had given up control over the prices of gasoline back in 2010 but had continued to regulate prices of diesel – the primary fuel used in trucks and tractors as well as for running generators used to power irrigation pumps. “It shields the government’s finances from volatility in global oil prices, because of which the subsidy bill often went up,” said Radhika Rao, an economist at DBS Bank. [...]

China GDP growth slowest since global crisis

Filed in China by on 22 October 2014

s China’s economy grew at its slowest pace since the depths of the global financial crisis in the third quarter and is on track for its worst annual performance since 1990, when the country was under international sanctions in the wake of the Tiananmen massacre. The government on Tuesday described the 7.3 per cent year-on-year expansion in economic output in the third quarter as China’s “new normal” and said it was comfortable with the slowdown. [...]

Alaska’s Oil Piles Up at Port as Barrels Wait for a Ride

Filed in USA by on 22 October 2014

Stockpiles of oil from Alaska ’s North Slope have surged to a five-year seasonal high as tanker maintenance slows loadings, forcing the grade to trade at a discount to U.S. crude for the first time since 2010. Inventories at the Valdez terminal, the northernmost ice-free port in North America and the loading point for Alaskan oil, have averaged 4.38 million barrels this month, the most for October since 2009, data posted on the Alaska Revenue Department’s website show. Tanker repairs have shrunk the pool of vessels available, terminal operator Alyeska Pipeline Service Co. said. The trapped stocks threaten to further cut prices for oil from the North Slope, once the most prolific crude-producing region in the nation, as refiners on the U.S. West Coast turn elsewhere for supplies. California is bringing in a record volume of oil by rail from other states and the region has increased imports from [...]

TransCanada’s Keystone Stand-in Faces $1 Billion Gas Feud

Filed in Canada by on 22 October 2014

 TransCanada Corp. (TRP) will have to spend $1 billion more than planned on an oil pipeline to Canada’s Atlantic Coast if natural gas customers get their way, a move it says would threaten the viability of the project. TransCanada has delayed seeking regulatory approval of the C$12 billion ($10.7 billion) Energy East line as it negotiates with Quebec’s Gaz Metro Inc. and Ontario units of Spectra Energy Corp. (SE) and Enbridge Inc. (ENB) , said two people familiar with the talks who asked not to be identified discussing a private matter. The spat centers on TransCanada’s plan to convert a 3,000-kilometer (1,865-mile) stretch of its mainline gas conduit to carry oil. The nation’s largest pipeline operator after Enbridge is pursuing Energy East as environmental opposition imperils other planned lines from Canada ’s oil sands to tidewater, including its Keystone XL. Gas distributors claim that converting [...]

EIA: Consumers spending less on energy

Filed in USA by on 22 October 2014

Energy Department reviews how much consumers spend on transportation, heat and electricity. (File/UPI/Bill Greenblatt) Better fuel efficiencies and a change in fuels used for home heating means most people are spending less on energy than before, the U.S. Energy Department said. “Because electricity and transportation spending accounts for more than two-thirds of consumer energy expenditures, increasing vehicle fuel efficiencies and changing fuels used for home heating have contributed to lower consumer energy expenditures relative to disposable income,” the department’s Energy Information Administration said Tuesday. said the average new vehicle sold in January got 24.9 miles per gallon of gasoline, an increase of nearly 5 mpg from October 2007. The number of consumers using natural gas has increased more than 3 percent from 2007. EIA said consumer energy expenditures as a percent of disposable income was lower last year than the average in the 1960s despite the rate of [...]

API: U.S. leverage hurt by oil export ban

Filed in USA by on 22 October 2014

 A report from the Government Accountability Office found consumer fuel prices would decline if authorities ended the 1970s ban on crude oil exports. John Felmy , API’s chief economist, said allowing free trade in the U.S. oil sector would have a ripple effect beyond the domestic market. “U.S. energy production is already having a major impact on world markets, and if policymakers embrace free trade, that influence will continue to grow in a way that benefits our economy,” he said in a statement Monday. U.S. refiners have expressed concern that easing the ban on crude oil exports would mean higher costs per barrel in the U.S. market. The GAO study found exports would raise domestic crude oil prices by as much as $8 per barrel. In terms of consumer benefits, the [...]

Consumer energy expenditures are roughly 5% of disposable income, below long-term average

Filed in USA by on 22 October 2014

Total U.S. household energy consumption expenditures have generally declined relative to disposable income since 1960, although during periods of high energy prices, consumers devote increasing shares of their income to energy. Energy expenditures ranged between 4% and 8% of disposable income since 1960. Consumer energy expenditures today are a lower percentage of disposable income than the average from 1960 to present (5.5% average). Consumer energy expenditures as a percent of disposable income in 2013 remain lower than the average since the 1960s, even though consumer energy prices grew faster than inflation over that period. Because electricity and transportation spending accounts for more than two-thirds of consumer energy expenditures, increasing vehicle fuel efficiencies and changing fuels used for home heating have contributed to lower consumer energy expenditures relative to disposable income. Source: U.S. Energy Information Administration, based on Bureau [...]

Kemp: Congressional Study Questions Embargo-Era Oil Policies

Filed in USA by on 22 October 2014

Lifting restrictions on U.S. crude oil exports could actually lower fuel prices for U.S. motorists and other consumers by contributing to a drop in world oil prices, according to a report from an influential congressional watchdog released on Monday. The Government Accountability Office (GAO) also recommended that the U.S. Department of Energy review the size of the Strategic Petroleum Reserve (SPR) to ensure it remains appropriate as net oil imports fall. Without a comprehensive re-examination, the Department cannot be sure the SPR is holding the right amount of crude and giving taxpayers good value for money, according to GAO (“Changing crude oil markets: allowing exports could reduce consumer fuel prices, and the size of the strategic reserves should be re-examined” September 2014). By focusing on the effectiveness of the export ban [...]

Total New CEO Will Contend With Slump in Production, Oil

Filed in France by on 22 October 2014

The successor to Christophe de Margerie, the outspoken Total SA (FP) boss who died in a Moscow plane crash, will have to contend with a slump in the company’s output and the failure of its exploration strategy. Patrick Pouyanne, currently the company’s refining chief and long-touted as a potential successor, will be nominated as chief executive officer at a board meeting in Paris today, Les Echos reported, without saying where it got the information. The new CEO must see through a round of cost cuts as lower oil prices and weak returns from refining eat into profit at France ’s largest company by sales. De Margerie, killed Oct. 20 when his private jet struck a snowplow on a Moscow runway, had sold older fields and sought to pare investments in new projects as part of a pledge to investors last month to cut $2 billion [...]

Will Cheap Gas Hurt Sales of Ford’s New Pickup?

Filed in USA by on 22 October 2014

Ford Motor Co. spent five years and some $3 billion developing a lighter-weight version of its F-150 pickup that burns less fuel. And that’s the problem: Gasoline prices have plummeted 15% in the last four months as it geared up to sell the new model. A technical tour de force, the new aluminum-bodied truck was designed and conceived for an era of higher fuel prices. It weighs 700 pounds less, is as much as 20% more fuel-efficient, and can tow up to 11% more weight than its predecessor. Due to go on sale in December, the 2015 model represents a bet by Ford that it can sell customers on new technologies to meet future fuel-economy standards. But an oil glut has undermined the company’s gamble on a vehicle that contributes 50% of its earnings in North America.

Texas RRC Oil and Gas Report, August Data

Filed in Oil Supply by on 22 October 2014

The Texas Rail Road Commission just released their oil and gas production report with the August data. As you probably know by now that this data is incomplete. The latest months will all turn down but as more companies report their data, which can be up to two years late, the data will reflect what is actually produced.  There is something strange about the August data however. This is the first time since last November that all four data sets, Crude, Condensate, Gas Well Gas and Casinghead (Associated) gas, are show lower production than the previous month. So keeping in mind that the previous months data was just as incomplete as this months is, the data should, if production is increasing, still show an increase. This month however, it does not.

Russia Loses Oil Ally in De Margerie After Moscow Crash

Filed in France, Russia by on 22 October 2014

Christophe de Margerie’s last act as chief executive officer of Total SA (FP) left no room for doubt about his feelings toward Vladimir Putin’s Russia . In a Moscow speech hours before the plane crash that took his life two days ago, De Margerie said U.S. and European Union sanctions on the country were “unfair and unproductive,” and that he opposed efforts to render it “isolated from the major global economic and political process.” Appearing before a receptive audience that included Prime Minister Dmitry Medvedev and a host of Russian executives, he cited his work as co-chair of a Franco-Russian business body alongside Gennady Timchenko — a commodities billionaire who was one of the first targets of U.S. sanctions. De Margerie’s death removes from the scene a businessman who rarely shied away from geopolitical debates and became one of Russia’s most outspoken allies in its efforts to avoid economic [...]

Russia, EU energy chiefs meet one-on-one

Filed in Ukraine by on 22 October 2014

Russian Energy Minister Alexander Novak met one-on-one with European Energy Commissioner Gunther Oettinger ahead of three-way talks that include Ukrainian delegates. Novak said earlier Tuesday he expected the meeting would result in a written agreement on the way to settle the long-standing issue. An already-fragile Ukrainian economy was left in further turmoil following the political upheaval that followed Kiev’s tilt toward the European Union in November. Russia meets about a quarter of European gas needs, though the bulk of that gas runs through a Ukrainian pipeline network. Last week, Oettinger said EU member states could stave off winter gas shortages . “No household in the EU has to be left out in the cold this winter,” he said. Gazprom said Monday it filled European underground gas storage facilities with about 80 percent of the [...]

Deadlock Over Russian Gas to Ukraine Remains

Filed in Ukraine by on 22 October 2014

Russia and Ukraine dashed expectations that they would end their long-running gas dispute on Tuesday, with Kiev’s inability to pay for its gas debts to Moscow emerging as the main obstacle.  Ukraine agreed to pay $3.1 billion toward its debts by the end of the year. Kiev now needs to raise $1.6 billion in additional funding before the two sides meet again next Wednesday, when the European Union said it was hopeful an interim deal could be signed that could avert gas shortages this winter, Russian and EU energy officials said.  The failure to resolve the deadlock comes despite heightened expectations over the past days both sides had agreed on all the main elements of a deal.

Russia slaps conditions on Ukraine gas deal

Filed in Ukraine by on 22 October 2014

Breaking point: Ukraine has had to import gas from its neighbours since Russia cut off its supply ©Yuriy Dyachyshyn/AFP Russia has raised further conditions for resuming gas supplies to Ukraine, dashing hopes that a deal to safeguard Europe’s energy supply this winter would be agreed on Tuesday. Moscow cut gas exports to Ukraine in June amid a payment dispute, and talks on restarting flows have been weighed down by the conflict between Kiev’s forces and pro-Russian militias. However, many officials had expected that a new deal on a gas price and a timetable for settling debts would be reached at a meeting in Brussels. More On this story Editorial Europe needs will to build energy union Energy spat tests EU resolve Moscow and Kiev talks end in an impasse UK blocks €5bn Russian North Sea deal On this topic Kremlin acts to silence human rights group Editorial Putin is [...]