Recent Articles

Oil prices fall on bloated U.S. crude storage

22 Mar 2017   Prices

Oil prices dipped on Wednesday as rising crude stocks in the United States underscored an ongoing global fuel supply overhang despite an OPEC-led effort to cut output. Prices for front-month Brent crude futures, the international benchmark for oil, were at $50.92 per barrel at 0051 GMT, down 4 cents from their last close. U.S. West Texas Intermediate (WTI) crude futures were down 8 cents at $48.16 a barrel. “Crude oil prices fell as concerns over rising U.S. inventories resurfaced… Rising exports in Libya also weighed on prices,” ANZ bank said on Wednesday. U.S. crude oil inventories rose by 4.5 million barrels in the week to March 17 to 533.6 million, the American Petroleum Institute (API) said late on Tuesday. The bloated storage comes as U.S. oil production has risen over […]

Oil Prices Fall As Markets Lose Faith In OPEC Output Cut Extension

22 Mar 2017   Prices

Crude prices are coming under selling pressure once again, as oversupply concerns dwarf OPEC production cut expectations. As equity markets join oil prices in charging lower, hark, here are six things to consider in oil markets today. 1) In in the aftermath of the OPEC production cut, Middle East producers have chosen to keep Asian customers well supplied, by swinging their exports east of the Suez. This is illustrated in our ClipperData below, which shows January loadings bound for Asia from Saudi Arabia and Iraq were nearly 800,000 bpd higher than October’s reference level, while flows heading west of Suez to North America were up just 50,000 bpd. This has flipped in March, however, with loadings bound for North America rising nearly 800,000 bpd versus October’s benchmark, while loadings bound for Asia are down nearly 300,000 bpd. We have said before that China is such a big market participant […]

NYMEX April natural gas continues rise, settling 5.2 cents higher

22 Mar 2017   Prices

The NYMEX April natural gas contract continued to march higher Tuesday, climbing 5.2 cents to settle at $3.093/MMBtu on a tightening supply-demand balance characterized by strong LNG feedgas deliveries, March demand above year-ago levels and a 2.8 Bcf/d year-on-year dip in production. “Late season cold strengthened the heating demand and LNG exports revived,” helping to provide support to a sustained recovery of the prompt-month contract throughout March, Viraj Sawant, energy market analyst with Gelber & Associates stated, echoing the tightening supply-demand balance. According to data from Platts Analytics’ Bentek Energy , total US demand for March to date maintains a 5.5 Bcf/d margin above 2016 levels, reaching an average around 82.3 Bcf/d. Total US dry gas production has dipped 2.8 Bcf/d from a year ago to reach a March to date average of 70.8 Bcf/d, resulting in a tighter supply-demand balance. LNG feedgas has been a key outlet for […]

How OPEC Lost The War Against Shale, In One Chart

22 Mar 2017   OPEC

At the start of March we showed a fascinating chart from Rystad Energy, demonstrating how dramatic the impact of technological efficiency on collapsing US shale production costs has been: in just the past 3 years, the wellhead breakeven price for key shale plays has collapsed from an average of $80 to the mid-$30s… … resulting in drastically lower all-in breakevens for most US shale regions. Today, in a note released by Goldman titled “OPEC: To cut or not to cut, that is the question”, the firm presents a chart which shows just as graphically how exactly OPEC lost the war against US shale: in one word: the cost curve has massively flattened and extended as a result of “shale productivity” driving oil breakeven in the US from $80 to $50-$55, in the process sweeping Saudi Arabia away from the post of global oil price setter to merely inventory manager. […]

An OPEC Deal Extension Isn’t As Simple As It Sounds

22 Mar 2017   OPEC

It’s been six months now that oil prices have been reacting to OPEC, first to the possibility of an agreement, and then to the production cut deal itself, forged by OPEC to rebalance the market. The deal–initially aired as ‘an agreement to agree on a deal’ in September and signed at the end of November—will likely impact the market for at least the next six months. The agreement clearly states that it is production that OPEC producers are vowing to cut, but Iraqi oil minister Jabbar al-Luaibi has recently claimed—rather emphatically—that it is exports , not production, that serve as the baseline for the cuts. And according to Iraq, the agreed-upon cuts have been all about exports all along. Of course, exports are the logical ‘by-product’ of production of oil exporting nations, but each of those producers feels the weight of production cuts differently. Each OPEC nation has a […]

Saudi Arabia’s Oil Supremacy Falters

22 Mar 2017   Saudi Arabia

Saudi Arabia is losing its grip on big oil markets it once dominated amid a deep production cut that has reshaped global petroleum trade routes and benefited rivals like Iran, Russia and the U.S. As it pursues a steep production cut aimed at putting a floor under oil prices, the world’s biggest crude exporter is conceding ground to American shale producers and hastening a retreat from the U.S., people familiar with current Saudi…

Iran’s 14 Billion-Barrel Oil Field Comes Online

22 Mar 2017   Iran

Back from the wilds of Asia. Just in time to witness one of the most critical new field start-ups the global oil sector has seen in years. That’s the South Pars offshore field on the Iran-Qatar border. Which was officially commissioned this week, according to reports from Iran’s oil ministry yesterday. What makes this project so important? Size — with the South Pars field holding more than 14 billion barrels, according to estimates from local engineers. The beginnings for the field will be relatively modest. With Iranian officials saying that production has initially commenced from seven wells, with output to rise to 35,000 barrels per day over the coming week. But given the massive estimates on the size of the South Pars reserves, this is a spot that could see production ramp up very significantly. With a number of other facts about this mega-project showing just how far Iran […]

Why Libya Oil Revival Hinges on Fate of Two Ports

22 Mar 2017   Libya

Libya’s ability to reclaim its role as a reliable supplier of crude depends on the fate of a pair of oil ports on the war-ravaged country’s coast. Es Sider and Ras Lanuf have changed hands twice this month as rival military groups have battled over them. The two ports hold almost half of Libya’s capacity to export oil from onshore terminals, and the country’s ability to sell abroad affects prices globally.

Libya’s oil ports have been a focus of competing political forces since central authority collapsed after the 2011 ouster and killing of strongman Muammar Qaddafi. Es Sider and Ras Lanuf are especially valuable because they are the main outlets for crude pumped at fields in Libya’s interior. When operating normally, Es Sider can export as much as 340,000 barrels a day, while Ras Lanuf can ship 220,000 barrels a day. Located in Libya’s so-called Oil Crescent along its central Mediterranean coast, the terminals together account for 47 percent of the total capacity of the country’s onshore oil ports. Whoever controls them has a grip on Libya’s most important source of income.

The ports were badly damaged in fighting in December 2014 and closed for 21 months. The National Oil Corporation reopened the terminals in September, but they stopped shipping cargoes abroad this month because of the latest hostilities. The export halts have had a knock-on effect on oil production: storage tanks at the terminals become full, pipelines feeding them back up with crude, and fields that produce the oil must curtail output. The new round of fighting over control of the ports starting in early March curbed the country’s oil production but left the facilities almost undamaged.

Nigeria orders developers in Niger Delta to resume work within 30 days

22 Mar 2017   Nigeria

Nigeria has given contractors 30 days to resume delayed development projects in the Niger Delta oil region or face prosecution, the presidency said on Tuesday. The government has been trying to build new roads and launch other projects to drag the region out of poverty and create jobs, aiming to give local people alternatives to joining the militants attacking oil facilities. The government has “directed that the list of all contractors who have not returned to site within the stipulated period be compiled and submitted to the Ministry of Justice and the Economic Financial Crimes Commission for investigation and prosecution,” it said in a statement. Many projects have been delayed due to the collapse in oil revenues or to graft accusations. The presidency also ordered the ministry of environment to ensure “progress” of an cleanup of oil spills in the Ogoniland area, a project delayed for years. “The Federal […]

Beset by delays, Myanmar-China oil pipeline nears start-up

22 Mar 2017   China, Myanmar

Nearly a decade in the making, a project to pump oil 770 km (480 miles) across Myanmar to southwest China is set for imminent start-up, with a supertanker nearing the port of Kyauk Phyu, marking the opening of a new oil trading route. Dogged by sensitive relations between Naypyitaw and Beijing, the $1.5 billion oil pipeline has been sitting empty for two years, but the two sides are now close to a deal, said Myanmar-based government and industry sources, despite some last-minute tensions. An agreement between China’s PetroChina and Myanmar’s government will allow the state energy giant to import overseas oil via the Bay of Bengal and pump it through the pipeline to supply a new 260,000-barrels-per-day (bpd) refinery in landlocked Yunnan province. The new […]

Japan’s Top Oil Experts Seek Solutions to Chinese Fuel Flood Problem

22 Mar 2017   China, Japan

Huddled deep within Tokyo’s government district, nearly two dozen of Japan’s top oil experts pore over a problem plaguing its energy industry: how can they stop China from pushing its crude refiners into a corner? The task force, summoned by the trade ministry, needs a strategy to save oil refiners battered by years of declining demand at home. The processors, including JX Holdings Inc. and Idemitsu Kosan Co., now face rising competition for sales in Asia, the world’s biggest oil market. The ministry fears that China’s move to adopt stricter fuel standards will spur regional rivals into producing higher quality products, forcing Japan out of the market. “We’ve been saying for more than 20 years that Japanese refiners should become stronger,” said Hidemasa Nishiyama, director of the trade ministry’s petroleum refining and reserve division. “The external environment has changed: the capacity of China and other countries is becoming excessive, […]

A Sign Of Slowing Demand? Chinese Refiners Reach Crude Import Quota

22 Mar 2017   China

China’s independent refiners known as teapots have used up the amount of imported crude that the government allocated to them in January, which means imports are likely to slow down through June, Platts estimates . That’s the month when Beijing will hold a second round of quotas. The January quotas had 45.64 million metric tons of imported crude distributed among the teapots, most of which has already been processed. This amount is close to that allocated to teapots for the whole of last year: 60 million tons. As a portion of total Chinese crude oil imports, the 2016 quota allocations were equal to 16 percent. The reason for the premature emptying of the tanks was that the 2017 allocations were based on how much each independent refiner had imported in January-October 2016, so those whose imports were higher in the last two months of the year received a lower […]

Oil’s Bad Timing Pressures Drillers as Banks Review Loans

22 Mar 2017   Shale Oil

‘The next month is going to be absolutely critical’: analyst Photographer: Brittany Sowacke/Bloomberg The rally in global oil prices has stalled at the worst possible time for explorers, just as banks reassess credit lines crucial to their growth. This year’s reviews, due to start next month, will arrive with the industry nursing a nasty case of whiplash. Spot prices surged late last year on OPEC’s pledge to cut output, hitting $54.06 a barrel in New York. Since then, they’ve fallen 12 percent, undercut by rising U.S. rig counts. Futures contracts show longer-term prices deteriorating as well. A drop below $45 would likely spur credit-line reductions, raising the specter of cuts that crippled drillers a year ago, said Kraig Grahmann, a partner in Houston for law firm Haynes & Boone LLP . Between the end of 2015 and October, when credit lines were last reassessed, the average borrowing base for […]

New projects, shale boom could trigger oil oversupply by 2018-19: Goldman

22 Mar 2017   Shale Oil

New production projects and a fresh shale boom could boost oil output by a million barrels per year and result in an oversupply in the next couple of years, according to Goldman Sachs. “2017-19 is likely to see the largest increase in mega projects’ production in history, as the record 2011-13 capex commitment yields fruit,” the U.S. investment bank said in a research note on Tuesday. OPEC’s landmark decision to limit output for the first time in eight years in a bid to arrest the existing supply glut reduced price volatility and increased stability, unintentionally helping the shale producers, the bank said. ADVERTISING “OPEC’s decision in November 2016 to cut production was rational, in our view, and fit into its role of inventory manager of last resort,” Goldman said. “However, the unintended consequence […]

Big Oil’s Plan to Buy Into the Shale Boom

22 Mar 2017   Shale Oil

Exxon, Shell, and Chevron plan to spend $10 billion in the U.S. shale patch this year. A gas flare is seen through the window as Royal Dutch Shell’s Scott W. Scheffler drives near Mentone, Texas, in Loving County situated in a central portion of the Delaware Basin, on Thursday, March 2, 2017. Big Oil is muscling in on shale country. Exxon Mobil Corp. , Royal Dutch Shell Plc and Chevron Corp. , are jumping into American shale with gusto, planning to spend a combined $10 billion this year, up from next to nothing only a few years ago. The giants are gaining a foothold in West Texas with such projects as Bongo 76-43, a well which is being drilled 10,000 feet beneath the table-flat, sage-scented desert, and which then extends horizontally for a mile, blasting through rock to capture light crude from the sprawling Permian Basin. While the first […]

U.S. oil production keeping oil prices low

22 Mar 2017   Prices, Shale Oil

Crude oil futures started the day slightly improved Tuesday after falling for seven of the last 10 sessions.  Prices remained below the $50 per barrel mark, an improvement on January 2016’s fall to below $30 per barrel, but well below the $100 per barrel seen 2014. Oil is regarded as a barometer of the global economy, and while stocks have traded up since the start of President Donald Trump‘s administration, the bump seen in stock prices in other sectors of the economy may not be showing up for the oil industry soon.  Producers in the United States are partially responsible for the current oversupply in oil. Global supply increased by 260,000 barrels per day in February, to 96.52 million barrels per day, and U.S. production is the highest it has been in a year, at 9.1 million barrels per day, roughly the amount Saudi Arabia produced in February.  The United States also has 528.4 million barrels in storage, seven percent more than it stored a year ago. The U.S. effort largely nullified a 2016 agreement by OPEC, Russia and 10 non-OPEC oil producing nations to limit production, which sent oil prices to about $55 per barrel but encouraged U.S. producers to pump more oil.

Oil, Gas Job Recovery Much Slower Than Industry Rig Count, Spending Growth

22 Mar 2017   Shale Oil

Higher oil prices and a US rig count surge propel industry earnings toward recovery, but hiring is expected to lag behind, according to Moody’s Investors Service. The U.S. rig count has almost doubled during the last 10 months and upstream spending is on track to increase up to 30 percent this year – but the workforce recovery is traveling at a much slower step. More rigs are back to work based on shale’s quick development cycle, minimal geological risk and producers’ nimble action to reduce costs, analysts at Moody’s Investors Service said in a new report. Since bottoming out in May, 357 land rigs have gone to work in onshore U.S. activity. About 48 percent of the total has joined the ranks in the Permian Basin, but lucrative plays in Texas’ Eagle Ford, as well as the STACK and SCOOP in Oklahoma, have also grown. The increased drilling activity […]

Trump Lays Plans to Reverse Obama’s Climate Change Legacy

22 Mar 2017   Climate, USA

President Trump is poised in the coming days to announce his plans to dismantle the centerpiece of President Barack Obama ’s climate change legacy, while also gutting several smaller but significant policies aimed at curbing global warming. The moves are intended to send an unmistakable signal to the nation and the world that Mr. Trump intends to follow through on his campaign vows to rip apart every element of what the president has called Mr. Obama’s “stupid” policies to address climate change. The timing and exact form of the announcement remain unsettled, however.

Can Big Oil Survive A CO2 Crackdown?

22 Mar 2017   Peak Oil

Over the long run, the oil business is under threat. There are various arguments about why that might happen. Peak supply people argue we are running out of oil. Peak demanders say that market saturation, efficiency, and new technologies will cause oil demand to peak and decline. Similarly, clean energy proponents argue oil will be undercut by electric vehicles. Another variation of this argument can be found in the “stranded assets” theory, which posits that low oil prices, cheaper alternatives or strict climate regulation – or some combination of the three – will keep vast volumes of unprofitable oil in the ground. A shrinking number of people see oil dominating the energy landscape decades from now. Or, even though it will likely still be a major source of fuel in, say, 2040, its growth is capped. Reasonable people can argue about how much oil will be consumed at what […]

Trump’s Budget: Valuing Military Over Energy

22 Mar 2017   Climate, USA

Last week President Trump unveiled his budget blueprint , which detailed savage cuts to most areas of discretionary spending while boosting defense outlays by a whopping $54 billion. Nearly all government agencies were major losers under the President’s budget, except for those dealing with defense and border security. The Department of Energy would see a 5.6 percent cut, or a reduction of $1.7 billion. But digging into those numbers, certain areas of DOE were winners while others were losers. Areas of DOE dealing with clean energy, smart grid technologies, and electric vehicles are either entirely eliminated or suffer steep cuts. Meanwhile, DOE’s nuclear weapons programs, where the bulk of the agency’s funding is allocated, would see an 11 percent increase. The blueprint also includes $120 million to restart the licensing for the Yucca Mountain nuclear waste storage facility in Nevada, which has been on ice for years. One item […]

Why Shell’s Oil Sands Sell Off Is Great News For Canadian Oil

22 Mar 2017   Canada, Tar Sands

There was a time when if a Canadian exploration and production (E&P) company bought out a foreign-controlled competitor, it was not only good for the country but financially beneficial because it qualified for government incentives. That Canada’s E&P industry was in the hands of too many foreign operators was regarded as a big problem in the National Energy Program of 1980. Patriating this key industry became a priority if not an obsession. Thirty-seven years later, this is clearly not an issue. However, industry watchers must reflect upon the multitude of responses to the announcement by Canadian Natural Resources Limited (CNRL) it was purchasing effectively all (except 10 percent of Athabasca Oil Sands Project or ASOP) of the oil sands production operations and leases held by the Shell Canada affiliates – Shell Canada Energy, Shell Canada Limited and Shell Canada Resources (Shell) for cash and shares totaling $11.1 billion. The […]

BP orders construction for new subsea production system

22 Mar 2017   Offshore

 Schlumberger subsidiary OneSubsea has been contracted to provide a subsea production system for BP’s Mad Dog 2 project in the Gulf of Mexico. The Mad Dog Phase 2 project is BP’s second stage of development for a planned offshore oil field. The phase builds on BP’s largest oil field discovery in the Gulf of Mexico. OneSubsea will be tasked with supplying undersea wells that extract petroleum. Company officials are confident their products will yield positive results for all industry partners while reducing risks. “Our equipment reliability is a key factor in mitigating project risk and this project will benefit from the supplier-led approach of using standardized equipment designs and specifications,” OneSubsea president Mike Garding said in a press release . The production contract includes […]

Oil Falls on Growing U.S. Drilling Activity

21 Mar 2017   Prices

Oil prices extended losses on Monday to trade near a four-month low after increased drilling activity in the U.S. indicated a strong rise in production was coming. U.S. crude futures settled down 56 cents, or 1.15%, at $48.22 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 14 cents, or 0.27%, at $51.62 a barrel on ICE Futures Europe. Oil prices have fallen by around 10% since the start of the…

Bullish Crude Bets Cut by Most Ever as Price Falls Below $50

21 Mar 2017   Prices

The exodus of oil-price optimists has begun. Money managers cut bets on rising West Texas Intermediate crude by a record amount during the week ended March 14, while wagers on a further price drop doubled as oil remained below $50 a barrel. “It’s sort of a negative feedback loop, where money managers were selling because the price was falling, and the price was falling in part because money managers were selling,” said Tim Evans, an analyst at Citi Futures Perspective in New York, in a telephone interview. Bets on rising WTI crude during the report week were reduced by the most on record in data going back to 2006, the U.S. Commodity Futures Trading Commission announced Friday. The cuts came as prices tumbled below $50 a barrel for the first time this year, and anxious executives discussed rising U.S. rig counts at an industry meeting in Houston. On Monday, […]

OPEC leans toward oil cut extension, but non-members need to be in: sources

21 Mar 2017   OPEC

OPEC oil producers increasingly favor extending beyond June a pact on reducing crude supply to balance the market, sources within the group said, although Russia and other non-members need to remain part of the initiative. The Organization of the Petroleum Exporting Countries is curbing its output by about 1.2 million barrels per day (bpd) from Jan. 1 for six months, the first reduction in eight years. Russia and other non-OPEC producers agreed to cut half as much. The deal has lifted oil prices LCOc1, but inventories in industrial nations are rising and higher returns have encouraged U.S. companies to pump more. A growing number of OPEC officials believe it may take longer than six months to […]

OPEC February Production

21 Mar 2017   OPEC

The new January OPEC Monthly Oil Market Report is out with crude only production numbers for February 2017. All charts are in thousand barrels per day. All data below is in thousand barrels per day and is through February 2017. OPEC crude oil production dropped to 31,958,000 bpd in January. That was a drop of 140,000 bpd. In January OPEC production dropped 930,000 bpd for a two month total of 1,070,000 bpd. Officially OPEC agreed to cut production by 1.2 million barrels per day beginning in January. So they are getting close. OPEC’s November production of 33,374,000 represented an all time high for the Cartel. I have added OPEC direct communication to what OPEC’s secondary sources says, Notice the difference in what Saudi says they produced and what their secondary sources say Saudi produced. One source sited this as the reason oil prices dropped today. Algerian production held steady […]

Is A Russian-Iranian Energy Pact In The Making?

21 Mar 2017   Iran, Russia

In the lead-up to President Rouhani’s visit to Moscow, expected to take place in late March , a plethora of news regarding joint Russo-Iranian energy projects has been circulating on the Internet. A three-year long negotiation process regarding a 100,000 barrels-per-day swap contract is believed to be agreed upon, premised on Iran providing Russia (most likely, Rosneft) oil from Kharg Island or other hubs in the Persian Gulf in return for cash and Russian goods that Iran would “require”. Teheran also woos LUKOIL, currently Russia’s only major oil producer in the Caspian, to participate in swap deals bound for Iran’s Neka Port (in return for Iranian crude provided from Kharg Island or other Persian Gulf hubs), albeit on a much smaller scale at 4000 to 5000 barrels per day. To top it all up, numerous Russian oil companies have committed themselves to developing Iran’s hydrocarbon fields. The lifting of […]

Libya Ports Poised to Ship Oil as Workers Back After Clashes

21 Mar 2017   Libya

Libya’s major oil ports of Es Sider and Ras Lanuf are resuming operations and preparing to export crude after a two-week halt in shipments due to military clashes in the holder of Africa’s largest crude reserves. Libya’s total production rose to 646,000 barrels a day from 621,000 barrels on Sunday mostly due to an increase from Waha Oil Co., Jadalla Alaokali, a National Oil Corp. board member, said Monday by phone. Waha Oil feeds into Es Sider, the country’s biggest oil port. Staff are returning to Es Sider and Ras Lanuf, its third-largest, and exports are set to restart in a week to 10 days, Alaokali said Sunday. “Both ports are ready to restart exports,” Alaokali said. Waha Oil, a joint venture between the NOC, Hess Corp., Marathon Oil Corp. and ConocoPhillips, suspended production earlier this month after clashes between armed factions in the politically divided nation forced Es […]

Russia enlarges military footprint in Libya

21 Mar 2017   Libya, Russia

Libyan Field Marshall Khalifa Haftar, a fiery commander in eastern Libya, has declared war against radical Islamists, including the Islamic State and al-Qaida, but is controversial for perceived iron-fist tactics. Photo courtesy of Wikipedia TUNIS, March 20 (UPI) — Russia, 19 months after becoming a key player in the Syrian war, is increasing its military presence in Libya and is likely to back Libyan Field Marshal Khalifa Haftar in the tumultuous civil conflict. Haftar, a fiery commander in eastern Libya, has declared war against radical Islamists, including the Islamic State and al-Qaida, but is controversial for perceived iron-fist tactics. In September, Haftar gained control of main oil terminals in the country’s east but lost ground to Islamist forces early this month. While Haftar has received intelligence and security support from France, Britain and the United States, as well as backing from Egypt and the United Arab Emirates, Western countries […]

Egypt moves from electricity deficit to sufficiency

21 Mar 2017   Egypt

The opening of three major power plants in March was the latest in Egypt’s efforts to end its electricity shortage crisis. “Huge work is being done in this country to end the problem,” said Gamal al-Qaluibi, a power engineering professor at Cairo University. “In less than two years, the government managed to end electrical power shortages and even pave the road for surpluses.” When they are operating fully in 2018 as expected, the three electrical power plants, one in the central province of Beni Suef and the others in the new capital being built on the outskirts of Cairo, will produce 14,000 megawatts of electricity every year. In 2013, Egypt produced 24,000 MW but 29,000 MW were needed to bring light to all households, make factory machines run, power equipment at hospitals and […]

Iran pulls first oil out of South Pars field

21 Mar 2017   Iran

Iran says it pulled its first batch of oil ever out of the South Pars field complex in the Persian Gulf. Photo by Mojtaba Mohseni/Shana March 20 (UPI) — The production of oil from the South Pars field complex in the Persian Gulf has started for the first time, the Iranian Oil Ministry declared. Shana, the Oil Ministry’s news website, reported production from seven oil wells in the South Pars complex began and should reach a net peak capacity of 35,000 per day in about a week. The oil ministry estimates the field, which Iran shares with Qatar, holds more than 14 billion barrels of oil. Gholam-Reza Manouchehri, the deputy managing director at the National Iranian Oil Co., was quoted by Shana as saying production was made possible through a floating production storage and offloading vessel, or FPSO. “By the time the FPSO recovers and processes a certain amount […]

Who Gets Control Of Libya’s Oil As The Guns Go Silent?

21 Mar 2017   Libya

The Libyan National Oil Corporation expects to soon regain control over the Es Sider and Ras Lanuf oil terminals, which were the point of clashes between the Libyan National Army and the Benghazi Defense Brigades that ended last week with the LNA taking the ports back from the BDB. Although there was doubt as to whether the LNA would be willing to pass control over the ports to the NOC again, the company’s chairman told Reuters there is no reason to doubt. Doubts are likely to remain, however, as last week saw developments that may lead to the split of the NOC along government/parliament lines. The LNA is loyal to the Tobruk-based House of Representatives, the Libyan parliament, which opposes the UN-backed Government of National Accord. The GNA, together with Libya’s central bank, controls the oil export revenues from the four ports in the Oil Crescent. When the LNA […]

Libya Ports Poised to Ship Oil as Workers Back After Clashes

21 Mar 2017   Libya

Libya’s major oil ports of Es Sider and Ras Lanuf are resuming operations and preparing to export crude after a two-week halt in shipments due to military clashes in the holder of Africa’s largest crude reserves. Libya’s total production rose to 646,000 barrels a day from 621,000 barrels on Sunday mostly due to an increase from Waha Oil Co., Jadalla Alaokali, a National Oil Corp. board member, said Monday by phone. Waha Oil feeds into Es Sider, the country’s biggest oil port. Staff are returning to Es Sider and Ras Lanuf, its third-largest, and exports are set to restart in a week to 10 days, Alaokali said Sunday. “Both ports are ready to restart exports,” Alaokali said. Waha Oil, a joint venture between the NOC, Hess Corp., Marathon Oil Corp. and ConocoPhillips, suspended production earlier this month after clashes between armed factions in the politically divided nation forced Es […]

Shrinking GDP, Surging Prices to Keep Nigerian Rates on Hold

21 Mar 2017   Nigeria

Faced with a contracting economy, surging inflation and a rigid exchange rate, Nigeria’s central bank will have little choice but to keep its key interest rate unchanged on Tuesday. The Monetary Policy Committee led by Governor Godwin Emefiele has held the policy rate at 14 percent since July and is unlikely to make a change, according to all 17 economists and analysts surveyed by Bloomberg. Foreign-exchange policy has become a common agenda-item for the committee as the nation maintains a managed currency float and has stopped importers of goods it deems non-essential from buying dollars on the official market. While this has contributed to a rapid increase in consumer prices, Emefiele said on March 11 that allowing the naira to freely float will hurt the economy, which shrank by 1.5 percent last year, the first contraction since 1991. “They won’t cut because inflation remains high, and they won’t hike […]

Misery Seen From Space Too Much for This Venezuela Bonds Fan

21 Mar 2017   Venezuela

There are plenty of reasons why BlueBay Asset Management LLP cut its holding in Venezuelan bonds, from the empty shelves in the supermarkets of Caracas to a nationwide dearth of spare auto parts. But few were more compelling than the satellite photograph of Puerto Cabello on the Caribbean coast, home to the country’s biggest port, which shows a once-vibrant terminal bereft of vessels. “If you can see a country’s economic decline from space, you know it’s in big trouble,” said Graham Stock, the head of emerging-market sovereign research in London at BlueBay, which reduced its holdings of the nation’s debt to below-benchmark levels. He estimates Venezuela’s imports have declined by as much as 50 percent in the last two years. The investment company that manages $50 billion dismissed warning signs last year about Venezuela’s ailing economy and bought the country’s dollar debt, which returned about 50 percent in 2016, […]

How Tesla Just Tripled Its Earnings In China

21 Mar 2017   China, Electric Cars

Earlier this month, Tesla Inc reported that its revenues in China topped $1 billion in 2016, more than triple the revenues it generated there in 2015. The Chinese market was only second to the U.S. in terms of revenue generation for Tesla last year. The electric carmaker is not breaking down revenues by items, and has not offered any explanation for the triple revenues in China. The revenue jump could have been the result of China’s license plate-issuing policies in major cities that fast track EV license plates issuing as the country grapples with perpetual pollution and traffic jams. Tesla’s Chinese revenues last year were $1.065 billion, compared to $318.5 million in 2015, and $477 million in 2014, the EV carmaker’s regulatory filing from March 1 shows. According to Reuters Breakingviews ’ Robyn Mak, one of the key contributors to Tesla’s soaring Chinese revenues is the local green-car, or […]

PDVSA Said to Replace Refining Managers as Shakeup Deepens

21 Mar 2017   Venezuela

Venezuela’s state oil company is replacing high-level managers at refining complexes and other divisions as it deepens a shake-up that began in January, according to people with knowledge of the situation. Managers at several of Petroleos de Venezuela SA’s major refineries have been replaced in the past weeks, Ivan Freites, a union leader, said Monday in a telephone interview. Widespread staffing changes across PDVSA, as the company is known, were confirmed by another person who works with PDVSA but isn’t authorized to speak about the matter publicly. Officials at the company’s press office and energy ministry declined to comment. The managerial changes come months after Venezuelan President Nicolas Maduro added two board members and installed new executives at PDVSA, including a rear admiral. In January, Maduro gave the job of oil minister — a position that was formerly held by PDVSA President Eulogio Del Pino — to Nelson Martinez, […]

Rig count hangover bruises crude oil prices

21 Mar 2017   USA

Under broader pressure from the so-called Brexit, crude oil prices moved lower early Monday on a hangover from higher U.S. exploration and production work.  Energy companies working in shale oil basins in the United States have adapted to lower price points so that, once the market does recover, they’re more efficient at returning to work. After forecasting production declines for 2017, U.S. federal data instead show steady gains and production so far in March has been at around 9 million barrels per day.  Data last week from oilfield services company Baker Hughes showed an increase in the number of rigs deployed in the United States for the ninth week in a row. Rig counts serve as a rough estimate of exploration and production, which in itself is indicative of energy sector spending and confidence. Gains in production from the United States, and producers from the Organization of Petroleum

Analysis: Chinese independent refiners’ crude oil imports set to slow on quota issues

21 Mar 2017   China

Crude imports by China’s independent refiners are expected to slow down in the coming months as several refiners have used up most of their allocation from the first round of import quotas and will need to wait until June for the second round before resuming purchases. Independent refiners need government-allotted quotas to import crude oil. A total of 45.64 million mt of quotas were allocated to 19 independent refineries in the first round in January. The refiners have submitted applications for a second batch of quotas, but the government is only expected to allocate fresh quotas in June leaving the refiners with the option of either reducing throughput or buying barrels from the domestic spot market, market sources said. China’s independent refineries imported a total of 60 million mt (1.2 million b/d) of crude oil in 2016, according to S&P Global Platts estimates. This represented 16% of China’s total […]

Robot Successfully Reports Killer Radiation Levels Inside Fukushima Reactor

21 Mar 2017   Japan, Nuclear

Tokyo Electric on Sunday confirmed lethally high radiation levels inside the primary containment vessel (PCV) of the heavily damaged unit 1 of the Fukushima Daiichi nuclear plant. A magnitude-9.0 earthquake and tsunami in March 2011 resulted in the meltdown of three of Fukushima’s six reactors. The disaster in Japan left around 19,000 people dead and more than 100,000 homeless. In the largest nuclear incident since Chernobyl, radiation levels were so high that every robot sent to explore the site has failed. Russia-Japan Relations Have Good Prospects if Tokyo Cuts Ties With ‘American Cerberus’ Finally, on Saturday the PMORPH robot inserted into unit 1 in the first of a series of four missions into the PCV basement area managed to provide the Tokyo Electric Power Company (Tepco) with the radiation and temperature measurements within it. Devices on the camera-equipped robot measured radiation levels of 7.8 sieverts per hour on a […]

Slow, steady economic growth for shale-rich Colorado

21 Mar 2017   USA

The economy for shale-rich Colorado is improving, though a tight labor market and pressure outside the energy sector may be constraining, a budget report finds. The labor market for Colorado is one of the strongest in the country, with the January unemployment rate ranking the third lowest at 2.9 percent. In his State of the State address in January, Colorado Gov. John Hickenlooper said his agenda balanced clean energy with gains from shale oil and gas. Oil from Colorado accounts for about one out of every 50 barrels produced in the United States. Spending in the oil and gas sector declined and put some pressure on tax revenue growth early last year when crude oil prices dropped below […]

Sea change needed for low-carbon economy

21 Mar 2017   Climate

Nearly 70 percent of all new cars need to be electric and $3.5 trillion in annual investments are needed to keep global warming at bay, a new report found. The International Energy Agency last week said energy-related emissions were flat for the third year in a row as world economies move away from coal to cleaner-burning resources like natural gas. A new report , however, finds more work is needed to limit the rise of the global mean temperature. A report published by the IEA and the International Renewable Energy Agency found the share of fossil fuels used to satisfy energy demand would need to be cut in half by 2050 and emissions would need to fall more than 70 percent to keep the mean […]

Plenty of Cash Lies Buried on Canada’s Oil Sands

21 Mar 2017   Canada, Tar Sands

Earlier this month, Marathon Oil agreed to spend more than $1 billion on acreage in the Permian Basin, the very hottest place on the planet to drill for oil. On the same day, it announced the sale of other properties 2,000 miles due north in Canada’s oil sands, a significantly less popular place to invest right now. Shareholders applauded, sending Marathon’s shares up 8% on the news, but the price of the company buying its unwanted…

Despite growth late in the year, U.S. crude oil production decreased in 2016

21 Mar 2017   Oil Supply, USA

Despite increasing crude oil prices throughout most of 2016, total U.S. crude oil production in 2016 was below its 2015 level . However, monthly production began growing in the fourth quarter of the year after declining over the first three quarters. Total 2016 production remained above the five-year average. With the removal of restrictions on exports of domestically produced crude oil at the end of 2015, crude oil exports increased. At the same time, the difference between Brent and West Texas Intermediate (WTI) crude oil prices narrowed, which made crude oil imports relatively more attractive and caused total imports of crude oil in 2016 to also increase. Both Brent and WTI crude oil spot prices increased in 2016. The Brent spot price increased from $31 per barrel (b) in January to $53/b in December, while the WTI spot price increased from […]

Clean Energy Can Bring $10 Trillion Annual Benefits By 2050

21 Mar 2017   Climate

A dramatically increased share of renewables and higher energy efficiency have the potential to create benefits of up to $10 trillion annually by 2050, compared to estimated incremental system costs of decarbonization of $1.8 trillion annually, according to a new report by the International Renewable Energy Agency (IRENA) and the International Energy Agency (IEA). Global GDP could be boosted by around 0.8 percent in 2050, or $1.6 trillion, while the cumulative gain through increased GDP from now to 2050 will amount to $19 trillion, the two agencies said in their joint report ‘Perspectives for the Energy Transition – Investment Needs for a Low-Carbon Energy System’, which was prepared at the request of the German government to provide input for the G20 presidency. However, the IEA noted that limiting the global mean temperature increase to below 2°C with a probability of 66% would “require an energy transition of exceptional scope, […]

Peak oil? Sooner than you think

21 Mar 2017   Peak Oil

For some time, there has been speculation about when global oil demand may peak – not because we will run out of oil or prices will spike making oil unaffordable, notions that are now considered passé – but because we won’t be needing as much of the stuff as we thought we would. And once the peak is finally reached – whenever that is – demand will begin to drop thereafter, perhaps precipitously. What is radically different about the new thinking about oil demand is that price, while still an important factor, no longer seems as important as it used to be. As further described alternatives to oil are or will soon be cheaper making the price of oil far less significant. Witness the fact that global oil has been growing at much slower clip in the last few years even though prices, hovering in the $40-60 range per […]

How Americans Think About Climate Change, in Six Maps

21 Mar 2017   Climate

Americans want to restrict carbon emissions from coal power plants. The White House and Congress may do the opposite. Percentage of adults per congressional district who support strict CO2 limits on existing coal-fired power plants A majority of adults in every congressional district in the nation support limiting carbon dioxide emissions from existing coal-fired power plants. But many Republicans in Congress (and some Democrats) agree with President Trump, who this week may move to kill an Obama administration plan that would have scaled back the nation’s greenhouse gas emissions. Nationally, about seven in 10 Americans support regulating carbon pollution from coal-fired power plants – and 75 percent support regulating CO2 as a pollutant more generally. But lawmakers are unlikely to change direction soon. Bob Inglis, a former Republican congressman from South Carolina, warned that committed activists — like the Tea Party — can shape politicians’ approaches to issues like […]

Oil-rich Russia revises GDP growth estimate higher

21 Mar 2017   Russia

As crude oil prices recover from last year’s historic decline, the Russian finance minister said the outlook for gains in gross domestic product have improved. Russia last year was producing oil at or near post-Soviet highs. According to economists at the Organization of Petroleum Exporting Countries, Russian oil companies were winning out because a decline in the value of the ruble made it economic to produce more oil for more revenue. Finance Minister Anton Siluanov said the ruble was overvalued at the moment. Looking ahead, growth in gross domestic production should settle between 1.5 percent and 2 percent, an improvement from previous estimates. “On the whole we agree that the economy will be growing faster than initially expected,” he was quoted by Russian news agency Tass as […]

Shell Goes on a Deep-Water Drilling Diet

21 Mar 2017   Offshore

Shell, the world’s second-largest publicly traded energy company, is making a high-stakes bet that it can take highly efficient technology and processes perfected onshore and deploy it in deep-sea production.  It hopes to squeeze more oil out of existing undersea wells, like those that ring the platform, which weighs 82 million pounds and floats in 3,000 feet of water over the Mars oil field in the Gulf of Mexico. It also wants to make new deep-water projects cheaper and faster, especially in Brazil, where it acquired a bevy of offshore prospects as part of its $50 billion purchase of BG Group PLC last year.  It is a strategy born of necessity. Big oil companies have traditionally needed prices of $70 a barrel or more just to break even on new deep-water projects, which take years to begin paying off.  But with onshore shale oil flooding the market, Shell executives aren’t sure when crude, currently around $50 a barrel, will fetch more again. And with electric cars and other technologies threatening to eat into demand, they believe the world’s thirst for oil may peak as soon as the end of next decade.

Oil Drops as U.S. Drilling Growth Threatens to Counter OPEC Cuts

20 Mar 2017   Prices

Oil fell as U.S. drilling continued to rise, undermining the potential for even an extended OPEC output-reduction deal to rebalance the market. Futures lost as much as 1.6 percent in New York after gaining 0.6 percent last week. Producers added more oil rigs to U.S. fields, extending a drilling surge into a 10th month, Baker Hughes Inc. said on Friday. Saudi Arabia is ready to extend cuts if supplies stay above the five-year average, Energy Minister Khalid Al-Falih said in an interview on Bloomberg Television last week. U.S. oil this month dropped below $50 a barrel for the first time this year as the nation’s near-record crude stockpiles and increasing production weighed on the output reductions by the Organization of Petroleum Exporting Countries and its allies. While OPEC won’t decide until May whether to prolong the curbs, energy ministers including Russia’s Alexander Novak will meet this weekend in Kuwait […]